- AI had “basically zero” impact on US economy by 2025, top economist claims
- No “tightening of the labor market” may be good for job security
- Global spending on AI infrastructure will rise to $758 billion by 2029, says IDC
Despite AI spending initially set to boost US economic growth by 2025 (by as much as 92%, depending on the source and figure, per Washington Post), banking experts argue that AI’s direct contribution to growth may actually have been negligible.
Jan Hatzius, chief economist at Goldman Sachs, has argued that AI investment has had “basically zero” effect on US GDP growth.
talking with Atlantic CouncilHatzius explained some of the flaws in current reporting, including that US GDP only counts domestic production by subtracting imports.
How has artificial intelligence actually affected the US economy?
It’s also worth noting that AI data centers rely heavily on imported components, with about 75% of the cost of a data center coming from imported parts.
Because much of this hardware is made in Asia, heavy AI spending may not benefit the US economy as much as originally thought, instead strengthening the economies of other nations.
“We don’t actually see AI investment as strongly growth positive,” Hatzius said, concluding that “most AI equipment is imported.” That said, he still acknowledges that AI’s impact still leans slightly positive — just far less than misrepresentations have previously indicated.
Still, post-pandemic productivity gains have correlated with the rise in AI deployment (though Hatzius doesn’t go into detail on AI’s impact on worker productivity), and further gains are also on the cards. With this in mind, experts are not predicting any “tightening of the labor market,” which could be good news for job security, but continued wage declines may not be such good news for workers’ pockets.
Overall, there is no consensus on how much AI contributed to US economic growth by 2025, but broadly speaking, it is clear that continued consumption will continue to accelerate the market more generally, and even if the US does not drastically benefit, other nations certainly will.
IDC research backs this up, predicting AI spending could hit $758 billion by 2029 (equivalent to $189.5 billion quarterly) – up from $82 billion in the last full calendar quarter.
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