Global investment in AI may reach $200 billion by 2025, cites Goldman Sachs

According to Goldman Sachs Economics Research, investment in artificial intelligence (AI) is growing swiftly and may reach $200 billion globally by 2025, which might ultimately have a significant influence on GDP.

The economists at Goldman Sachs, Joseph Briggs, and Devesh Kodnani, recently revealed that generative AI has significant economic potential and might increase global labor productivity by over 1% per year within a decade after broad adoption.

However, for large-scale transformation to happen, firms will have to invest heavily upfront in digital, human, and physical resources to acquire, adopt, and reconfigure new technology and business processes. The researchers highlighted in a note that the expenditures, which might total $200 billion globally by 2025, are likely to happen before efficiency gains begin to generate major gains in productivity.

According to the note, the United States is best positioned to benefit from AI technology, and American corporations will likely be early adopters. While other nations, including China, would also feel the effects on their economy, the impact on investments will be less dramatic and may take longer to materialize.

Apparently, ff growth estimates are met, AI-related investment may reach 2.5 to 4% of GDP in the US and 1.5 to 2.5% of GDP in other key AI leaders in the long run.

As per sources, the investment effect may commence in the second half of this decade if larger enterprises in the professional, information, and scientific and technological services sectors embrace the strategy earlier.

According to the study, AI investment in the United States could hit $100 billion by 2025 and $200 billion globally. Briggs and Kodnani have also claimed that despite this rapid rise, the near-term effects on the economy are likely to be relatively modest considering that AI-related investment currently contributes to a very low proportion of U.S. and global GDP.