As the world takes further strides into the digital age, investment in artificial intelligence (AI) is accelerating at a rapid pace. The impact on the U.S. gross domestic product (GDP) could be colossal, potentially surpassing the historical effects of significant events like the advent of electricity or the personal computer age. This is the bold claim made not by a tech enthusiast, but by an esteemed global investment firm, Goldman Sachs in a report released on Tuesday.
This deep-dive analysis by economists Joseph Briggs and Devesh Kodnani provides an enlightening view, indicating that “generative AI” could fuel global labor productivity by over 1% a year in the decade after its widespread adoption. It’s a shiny vision of the future, but not without its challenges. Before such a seismic transformation can materialize, companies are expected to make substantial investments in various aspects of their organizations.
Capital would need to be poured into physical, digital and human resources to update technological infrastructure, transform business processes and indeed reshape entire industries. Goldman Sachs predicts these initial investments alone could reach around $200 billion globally by 2025. Yet, these costs are expected to be incurred in advance, long before the eventual productivity gains can offset the expenditure.
In the longer run, AI investment could account for a staggering 2.5% – 4% of U.S. GDP, and between 1.5% to 2.5% of other AI-future powers, according to the report. But there’s a caveat; despite the rapid surge in investment growth, the near-term GDP impact is predicted to see only modest growth since AI-related capital expenditure, at this stage, is still a small fraction of U.S. and global GDP.
Also, as of now, the majority of AI investment is seen directed predominantly towards model development. The study underlines that scaling generative AI on a larger spectrum would require a much larger push on hardware and software fronts.
As for the timeline, the economists project that AI adoption will start to make a tangible impact on the U.S. economy between 2025 and 2030. So, while the rate of investment in AI might be pointing to an imminent tech-driven economic revolution, it seems the old adage stands – nothing worthwhile comes easy, or fast, for that matter. As with any transformative change, it appears that patience and perseverance will be key in unlocking the immense potential of AI.
Source: Coindesk
