AI investment will be about $600 billion this year, some 2% of GDP, Goldman Sachs economists find.
Goldman Sachs: $600B AI investment (2% GDP) displaces tech and construction labor; crowding-out smaller than headlines. Higher borrowing costs tighten non-hyperscaler capex, yet real crowding-out impact is less severe than media suggests.
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When investment on the scale of the current AI boom occurs, it inevitably has to come at the expense of something. All the resources devoted to building data centers and developing AI models would otherwise go to something else.
The big picture: This crowding out is smaller than you might expect, Goldman Sachs economists find in a new note.
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“Surging capex spending related to AI will likely prevent a major increase in the buyback payout ratio," the bank says.
