Goldman Sachs: Why AI Spending Is Not Boosting GDP

Goldman Sachs, in a research note Thursday (the note isn't publicly posted): Annualized revenue for public companies exposed to the build-out of AI infrastructure increased by over $340 billion from 2022 through 2024Q4 (and is projected to increase by almost $580 billion by end-2025). In contrast, annualized real investment in AI-related categories in the US GDP accounts has only risen by $42 billion over the same period. This sharp divergence has prompted questions from investors about why US GDP is not receiving a larger boost from AI.

A large share of the nominal revenue increase reported by public companies reflects cost inflation (particularly for semiconductors) and foreign revenue, neither of which should boost real US GDP. Indeed, we find that margin expansion ($30 billion) and increased revenue from other countries ($130 billion) account for around half of the publicly reported AI spending surge.

That said, the BEA's (Bureau of Economic Analysis) methodology potentially understates the impact of AI-related investment on real GDP by around $100 billion. Manufacturing shipments and net imports imply that US semiconductor supply has increased by over $35 billion since 2022, but the BEA records semiconductor purchases as intermediate inputs rather than investment (since semiconductors have historically been embedded in products that are later resold) and therefore excludes them from GDP. Cloud services used to train and support AI models are similarly mostly recorded as intermediate inputs.

Combined, we find that these explanations can explain most of the AI investment discrepancy, with only $50 billion unexplained. Looking ahead, we see more scope for AI-related investment to provide a moderate boost to real US GDP in 2025 since AI investment should broaden to categories like data centers, servers and networking hardware, and utilities that will likely be captured as real investment. However, we expect the bulk of investment in semiconductors and cloud computing will remain unmeasured barring changes to US national account methodology.

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