Investing.com — Goldman Sachs has said that the surge in artificial intelligence (AI) spending may be displacing other business activity, although it has so far found only limited evidence of this impact.
In a note to clients, analyst Jessica Rindels estimated that AI investment in the United States will reach nearly US$600 billion in 2026, equivalent to almost 2% of US GDP, and has accounted for more than 10% of business fixed investment in recent quarters.
Rindels argued that this rapid growth raises questions over whether AI investment is crowding out other forms of spending, particularly as a large share of AI-related expenditure is allocated to imported technology goods.
Regarding shifts in other technology investment, Goldman Sachs noted that hyperscalers, or large-scale cloud infrastructure providers, are financing much of their AI expansion by reducing share buybacks. They have also been “willing to take on debt and appear largely unaffected by higher interest rates”.
Among businesses using AI services, Goldman Sachs surveys indicate that costs remain relatively small, with around two-thirds funded through reductions in other spending.
Regarding borrowing costs, the firm said AI-related financing has grown to account for nearly a quarter of investment-grade bond issuance. However, spillover effects “appear limited so far”, with non-AI credit spreads remaining close to historically low levels.
Overall, Goldman Sachs concluded that AI’s contribution to GDP growth, as well as its crowding-out effects, is “smaller than is often assumed”, with an estimated US$50 billion in additional displacement in 2026.
Source from Investing.com
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