Global AI investment to hit $1 trillion: Goldman Sachs
What's the story
Goldman Sachs Research has predicted that global investment in artificial intelligence (AI) will reach around $1 trillion by 2026. The forecast suggests a steady growth in AI-related capital expenditure over the next two years. The projection also predicts an increase from 0.9% of global GDP in 2026 to 1.3% in 2027 and further up to 1.4% by the end of 2028.
Investment distribution
US to lead global AI investment
The research estimates that global AI-related investment will total around $1 trillion this year, with the US accounting for a major chunk of it at $581 billion.
This figure is much higher than the commonly cited estimate of about $794 billion in capital expenditure by US hyperscalers.
The Goldman Sachs projection also includes investments from private companies, non-hyperscaler firms, and international corporations.
Long-term projection
Cumulative AI investment since 2022 could hit $1.8 trillion
Goldman Sachs also forecasts that the cumulative investment in AI since 2022 could hit $1.8 trillion by the end of 2026.
The bank acknowledges that the speed and scale of AI investment are major uncertainties for macroeconomic and financial markets.
This is especially true as investors try to determine how much further AI capital expenditure can grow as a percentage of GDP, and when its growth might start decelerating.
Future growth
Projected GDP contributions from AI investments
Goldman Sachs's projections show that AI investment in the US could grow from 1.8% of GDP in 2026 to 2.5% in 2027 and further to 2.8% by the end of 2028.
Globally, AI investment is expected to reach up to 1.4% of GDP by this time period.
These levels are still within historical ranges seen during previous general-purpose technology buildouts where peak investment impulses typically hit between 2%-5% of GDP.
Market analysis
Key indicators for AI capital expenditure growth
Goldman Sachs examined several indicators such as semiconductor manufacturing equipment imports in Taiwan and South Korea, purchasing managers' indices, import prices, memory purchase prices, and GPU rental prices.
The research found these indicators are currently near their upper limits since 2022.
This indicates a positive signal for growth in AI capital expenditure.