A recent study reveals that global investments in artificial intelligence (AI) are projected to reach $200 billion by 2025, potentially making a significant impact on the gross domestic product (GDP) of various countries. The Goldman Sachs Economic Research report suggests that while AI investments might initially have a slow start, they could eventually lead to major gains in productivity.
To achieve widespread transformation, businesses need to make substantial investments in physical, digital, and human capital to acquire and implement new technologies. These investments, estimated to reach $200 billion globally by 2025, will lay the foundation for adoption and efficiency gains in the future.
Goldman Sachs predicts that in the long run, AI-related investments could represent 2.5% to 4% of GDP in the United States and 1.5% to 2.5% in other leading AI countries. However, the investment impact may be larger and more immediate in the US, which is currently positioned as the market leader in AI technology. American companies are expected to be early adopters of AI, while other countries, such as China, might experience smaller and delayed investment impacts.
One type of AI technology with enormous economic potential is generative AI. If widely used, generative AI could increase global labor productivity by over 1 percentage point annually for an entire decade. While chief executives in the US express a degree of skepticism about the impact of generative AI on their companies in the short term, the majority believe AI adoption will occur within the next three to ten years.
Generative AI, popularized by Microsoft-backed OpenAI’s ChatGPT, has attracted significant investor interest. Start-ups in this field have received over $4.2 billion in funding through 215 deals in 2021 and 2022 alone. The potential of AI is also being recognized in regional economies, with GCC countries expected to benefit from $23.5 billion in economic gains by 2030 due to investments in generative AI.
As AI continues to gain traction, businesses are expected to focus their investments on training and developing AI models, providing AI infrastructure, developing AI-enabled software, and utilizing AI applications in various industries. The timing of the AI investment cycle is challenging to predict, but surveys indicate that it is likely to accelerate in the second half of this decade, particularly among larger firms in information and professional, scientific, and technical services.
FAQ
What is the projected amount of global AI investments by 2025?
Global AI investments are projected to reach $200 billion by 2025.
What impact could AI investments have on the economy?
AI investments have the potential to have a significant impact on the gross domestic product (GDP) of various countries.
What types of investments are needed to trigger large-scale AI transformation?
Businesses need to make significant upfront investments in physical, digital, and human capital to acquire and implement new technologies and reshape business processes.
Which country is positioned as the market leader in AI technology?
The United States is currently positioned as the market leader in AI technology.