The penetration of innovations in the realms of electricity and computing into broader economic domains has ushered in an investment frenzy equivalent to 2% of the US GDP. The rapidly burgeoning landscape of artificial intelligence investments, according to analyses from Goldman Sachs Economics Research, could exert a far more significant influence on the global economy in the future. The anticipation lies in the surge of AI investments over the upcoming three years.
As highlighted within a comprehensive report by Goldman Sachs economists Joseph Briggs and Devesh Kodnani, the realm of productive artificial intelligence harbors immense potential and, when extensively harnessed, could elevate global production capacity by over 1% in the next decade. However, to orchestrate this substantial transformation, businesses need to allocate considerable capital to procure and integrate these technological products into operations. The projected investments, expected to amass around $200 billion worldwide by 2025, will likely materialize before the wide-scale adoption of these technologies yields tangible returns.
Briggs and Kodnani underscore that investments in artificial intelligence, currently at a relatively modest scale, are swiftly escalating. The tangible impact of these investments on the economy is poised to manifest over the course of several years. Meanwhile, the United States stands as a market leader in AI technology, and as per insights from Goldman Sachs Research, American enterprises are highly likely to spearhead the adoption of this innovation. Naturally, a similar effect could resonate in other nations contending for AI leadership; however, the impact of investments may be more modest in scale and delayed.
Should the projections of Goldman Sachs Research materialize as envisioned, investments in artificial intelligence could eventually account for 2.5% to 4% of the US GDP, and 1.5% to 2.5% for pioneering AI countries. While predicting the precise timeline of events within the AI investment cycle remains challenging, industry studies hint at a potential investment impact within 7 to 8 years, driven by early adoption from large-scale corporations in computing, science, and technology sectors.
Moreover, though the enhanced productivity through AI might take some time to crystallize, the market's interest in artificial intelligence has surged notably, with 16% of Russell 3000 companies referencing this technology in their earnings reports.
Nvidia takes the forefront among companies whose stock values have surged, fueled by advancements in AI endeavors. Since October 2022, Nvidia's shares have quadrupled in value. Furthermore, the company is set to reveal its financial report after the market closes this Wednesday.
Apple and Microsoft, too, find themselves among the companies capitalizing on the AI wave by featuring AI in their balance sheets. Both corporations have witnessed their shares grow by an average of 50% since the beginning of the year. Another beneficiary of the AI fervor is Intel, who, surpassing expectations with an unexpectedly positive earnings report, has enjoyed an approximate 35% increase in value since the start of the year.
On the other hand, Amazon, the latest to join the bandwagon, announced plans involving specialized AI chips and the Bedrock platform in its recent earnings release. The positive trajectory of the company's profits aligning with its AI aspirations sends a promising message."
