AI Will Have Big Effect on US Economy by 2027, Goldman Says

The American artificial intelligence industry is far ahead of the rest of the world, it notes, and you don’t have to worry about Skynet from “The Terminator.”

When will artificial intelligence become a big important factor in economic life? It will have a measurable impact on the domestic economy in four years, with the rest of the world trailing because the U.S. is the leader in AI, according to a report by Goldman Sachs researchers.

The U.S. would benefit the most, as it leads the world in AI innovation, the study observed. Indeed, a Stanford University study found that, in 2022, the U.S had the largest number of AI companies, at 542, followed by China at 160 and the U.K. at 99.

AI will spur increased automation, covering 25% of labor tasks in developed economies and 10% to 20% in emerging markets, wrote Goldman economists Joseph Briggs and Devesh Kodnani.

Will it be a job killer? Not much of one, Goldman concluded. “We expect this automation to drive labor cost savings and free up workers’ time, some of which will likely be allocated to new tasks,” Briggs and Kodnani wrote, by leaving more menial tasks to machines and making humans more productive at other important work.

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Annual increases in U.S. gross domestic product are projected to be 0.4 percentage points over the next 10 years, outpacing an average of 0.3 for other developed markets and 0.2 for emerging markets, they calculated. According to the report, areas that will benefit the most are health care (in particular, drug discovery), cybersecurity, design and software development.

What about the threat that AI could take over from people, as in the “Terminator” movies, in which an evil master cyber-brain, Skynet, wiped out most of humanity and sent cyborgs to destroy the rest? Not happening, nor will anything close, Goldman decided. Predictions that AI will grow into a super intelligence, a la Skynet, are “very premature, especially given the well-documented limitations of current AI models,” Briggs and Kodnani declared.

The report also predicted that AI could boost worldwide GDP by 15% over the next 10 years, a doubling of Goldman’s previous forecast earlier this year. Nonetheless, the report acknowledged that the 15% estimate could be on the high side, as technology-driven growth sometimes slows as it gets widely adopted.

This increase in the world’s economy will take time to emerge, Goldman indicated. Surveys of businesses and executives show they anticipate AI usage and AI-related hiring to really start kicking three years from now.

AI has shown a steady advance in adoption by corporations, which has increased with recent advances in the field. Globally, the proportion of companies adopting AI more than doubled from 2017 to 2022, with 22% now saying they have included some form in their workplaces, per McKinsey & Co.’s annual research survey.