Goldman Sachs' Joseph Briggs: Gen AI could lift U.S. labor productivity 15% in 10 years

AI Spending & Investment - AI spending is a key focus during earnings, with Apple, Meta, and Alphabet reporting massive jumps in AI spend, leading to a total capex spend reaching $116 billion [1] - Goldman Sachs estimates current AI spending in the US is a little bit below 1% of GDP [3] - AI investment cycle could reach around 2% of GDP [5] - Current annualized AI spending is estimated between $250 billion and $300 billion, based on hyperscaler capex, revenue of companies exposed to AI buildout, and national accounts data [8] - AI spending levels are not exceeding historical levels when normalized by GDP [9] Productivity & Economic Impact - AI is expected to lead to a 15% gross uplift to labor productivity following full adoption, potentially creating $8 trillion in economic value [9][10] - The expected 15% productivity boost from AI is broadly in line with the internet era and the adoption of electric motors in the early 1900s [10] - Goldman Sachs forecasts the first boost to GDP from AI in 2027, peaking at around 05% uplift to overall GDP in the 2030s [13] AI Adoption - Only 10% of companies report using AI for regular production, indicating adoption levels are too small to impact macro statistics yet [11] - Among Goldman Sachs investment banking clients, 37% are starting to use AI for regular production, suggesting increasing adoption among US corporates [12] - The tech sector has seen a slowdown in job growth over the last year, potentially indicating early labor market impacts from AI [14]