AI and the US economy – Minor gains now, but future benefits

The impact of AI is highly visible in some segments of the economy but barely seen in others, leaving the net effect on productivity, employment, and GDP as negligible at best.

What you will learn:

• The main benefits will be felt later this decade through increased productivity, which is already assumed in the baseline. The good news is that the adoption of AI is running on the high end of our expectations, suggesting some upside risk to our forecasts for US growth.
• The investment surge in chips and data centers, and the jump in computer products trade make it clear that the AI boom isn’t going away. However, the net impact on GDP has been minimal. We figure it added a net $50bn to US GDP over the past two years, or a 0.1ppt boost to growth.
• As investment deepens, we will see AI spending broaden within equipment investment. A key risk to the outlook is that a global trade war interrupts the supply chains that underpin this investment, though this would be a delay rather than an elimination.