Goldman Sachs Forecasts US AI Spending to Hit $1.4 Trillion

Goldman Sachs forecasts that annualized U.S. spending on artificial intelligence hardware and intellectual property will reach $1.4 trillion by the end of 2027. This projection follows an expected spending level of over $900 billion by the end of 2026, meaning AI expenditures would represent nearly 4% of U.S. GDP.

Despite the scale of this capital expenditure, the bank estimates the direct boost to U.S. GDP growth will be limited. The growth is projected at 0.2 percentage points excluding semiconductors, or 0.6 percentage points including them, because most information processing equipment is imported and netted out of GDP calculations.

The bank expects 2027 U.S. business investment to grow by approximately 8%, which is double the current market consensus. While Goldman Sachs views recent Democratic midterm election victories as a limited risk to these investments, it identifies rising borrowing costs and potential Federal Reserve interest rate hikes as the primary pressures on funding for AI build-outs.