- AI will have ‘virtually no impact’ on US economy in 2025, says leading economist
- No “tightening of the labor market” could be beneficial for job security
- Global spending on AI infrastructure will reach $758 billion by 2029, says IDC
Although AI spending is initially intended to support US economic growth in 2025 (up to 92%, depending on the source and figures, according to Washington Post), banking industry experts say AI’s direct contribution to growth might actually have been negligible.
Jan Hatzius, chief economist at Goldman Sachs, said investments in AI had “virtually no effect” on U.S. GDP growth.
Talk with Atlantic CouncilHatzius explained some of the flaws in the current reporting, including the fact that U.S. GDP only accounts for domestic production by subtracting imports.
How has AI actually affected the US economy?
It is also worth noting that AI data centers rely heavily on imported components, with around 75% of the cost of a data center coming from imported parts.
Since much of this hardware is manufactured in Asia, major spending on AI may not benefit the U.S. economy as much as initially thought, but instead supports the economies of other countries.
“We don’t actually see investments in AI as strongly positive for growth,” Hatzius said, concluding that “most AI equipment is imported.” That being said, he still acknowledges that the impact of AI remains marginally positive – much less than the false claims previously suggested.
Still, post-pandemic productivity increases correlate with increased AI deployment (although Hatzius doesn’t go into detail about AI’s impact on worker productivity), and further gains are to be expected as well. With this in mind, experts aren’t predicting a “tightening labor market,” which might be good news for job security, but continued wage deceleration might not be such good news for workers’ pockets.
Overall, there is no consensus on AI’s contribution to U.S. economic growth in 2025, but generally speaking, it is clear that continued spending will continue to accelerate the market more generally and, even if the United States does not benefit significantly, other countries certainly will.
IDC research backs this up, forecasting that AI infrastructure spending could reach $758 billion by 2029 (equivalent to $189.5 billion per quarter), up from $82 billion in the last full calendar quarter.
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