Goldman Sachs says the long-term economic payoff from artificial intelligence is likely to far exceed the investment required — but warns that equity markets have already priced in much of that upside.
In a research note, the bank estimates that the present discounted value of additional capital income generated by AI over the next 10 to 15 years could reach $8 trillion in its baseline case, with a wide range of $5–19 trillion depending on adoption speed and productivity gains. By comparison, Goldman’s projections for cumulative AI-related capital expenditure remain well below that level, suggesting a substantial net economic benefit.
However, the bank cautions that the stock market may have moved too far ahead of the fundamentals. Equity valuations, especially in the US, already reflect much of AI’s potential earnings boost. That, Goldman says, is a key reason its strategists expect 10-year returns on US equities to undershoot both historical norms and the forward-looking returns of non-US markets — even though the US continues to show stronger earnings momentum and greater technological dynamism.
The result is an outlook where AI promises massive long-run economic value, but investors may face more modest returns from current valuation starting points.
This article was written by Eamonn Sheridan at investinglive.com.