Surge in Global AI Investment Expected, with a Peak of $200 Billion by 2025 - Goldman Sachs Report

JJohn August 15, 2023 4:17 AM

Goldman Sachs economists predict a significant increase in global AI investment, which could reach $200 billion by 2025. The adoption of generative AI could significantly boost labor productivity and economic output.

AI Investment Predicted to Skyrocket

Anticipating the future of AI technology, Goldman Sachs economists Joseph Briggs and Devesh Kodnani have projected a significant boost in global private investment in the field. Their predictions suggest that the total investment, currently marked at $91.9 billion, could surge to an astonishing $200 billion by 2025. This huge leap would represent an overwhelming 72% increase in investment over a three-year period, indicating a bright future for AI technology on the global stage.

Over the past decade, AI investment has been on a steady upward trajectory. Key contributors to this growth have been the revenues generated by leading tech firms such as Microsoft Azure, Nvidia, Google Cloud, and Amazon Web Services. These heavyweights have played a pivotal role in taking the annual AI investment from a modest $3.2 billion in 2013 to a substantial $48.2 billion in 2020. This trend underlines the increasing importance and influence of AI technology in the modern business landscape.

U.S. Dominates Global AI Investment

The United States has been leading the charge in AI investment, contributing more than half of the global total in 2022. With a hefty investment of $47.4 billion, the U.S. accounted for a significant 51.6% of the global total of $91.9 billion. Looking ahead, the Goldman Sachs report forecasts that American AI investment will continue to grow, hitting a staggering $81.7 billion by 2025. The U.S. appears set to continue its dominant role in the global AI investment landscape.

The future of AI investment is expected to be centered around four key business segments. These include firms that specialize in training or developing AI models; companies that provide the necessary infrastructure to support AI applications, such as data centers; software development companies that facilitate the use of AI; and corporate end-users who pay for software and cloud infrastructure services. These sectors are predicted to be the primary beneficiaries of the increased AI investment in the coming years.

AI Investment in Context of Global Economy

Despite the anticipated surge in AI investment, it's important to note that this investment will still only represent a relatively small fraction of the U.S. and global economic output. While AI technology is undeniably influential and its potential impact is immense, the overall share of AI-related investment in the context of the larger economy remains relatively small at this stage. This however, does not diminish the potential impact of AI on future economic growth and innovation.

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