AI to stay dominant force behind US business investment in 2027, Goldman says

Goldman Sachs on Wednesday forecast annualized spending on artificial intelligence-related hardware and intellectual property will climb to $1.4 trillion by the end of 2027, equivalent to nearly 4% of the US economy.

"AI will remain the dominant driver of business investment growth in 2027," the brokerage said, forecasting spending to exceed $900 billion by the end of 2026.

Here are some details:


* The view comes amid concerns that rising borrowing costs and increased investor scrutiny could curb AI-related capital spending, particularly as companies lean more heavily on debt-funded expansion

* Democrats' victories in the US midterm elections earlier this month sparked concerns over tighter regulation of data-center development, but Goldman Sachs said the outcome poses only limited risks to AI investment

* Goldman estimates AI-related investment will directly boost 2027 capex growth, including semiconductor investment by 5.3 percentage points and US GDP growth by 0.6 percentage points

* "Semiconductor investment is undercounted in the business investment statistics, and most information processing equipment is imported and is thus netted out of GDP," Goldman said

* Excluding semiconductor investment, AI-driven investment will boost 2027 capex growth by 4.3 pp and US GDP growth by only 0.2 pp, the brokerage said

* Overall, Goldman forecasts US business investment growth at 8% on a quarterly basis in 2027, nearly double the consensus forecast of 4.2%