Massive investment in AI has contributed nothing to economic growth last year, Goldman Sachs has calculated
A new economic indicator has captivated Silicon Valley, Wall Street and Washington.
Technology companies’ massive spending on artificial intelligence accounted for half or more of U.S. growth last year, some economists calculated, effectively propping up an otherwise anemic economy.
To President Donald Trump and his advisers, the figures showed that AI is helping spark an economic renaissance that must not be impeded by regulation. To some critics, including Rep. Alexandria Ocasio-Cortez (D-New York), the data revealed an economy dangerously addicted to AI.
Either way, it became conventional wisdom that the technology was now a major engine of growth in the world’s largest economy.
But a growing number of forecasters now say the economy’s dependence on AI was overstated.Prominent economists, including from Morgan Stanley and JPMorgan Chase, calculate that the AI buildup was directly responsible not for 92 percent or 39 percent of gains to the U.S. economy in 2025, but as little as zero. [Continue reading…]