26. February 2026
Goldman Sachs Warns Ai Boom May Not Boost Us Economy As Much As Expected
The Role of Artificial Intelligence in the US Economy
Recent years have seen significant interest in the relationship between artificial intelligence (AI) and the US economy, with investments by AI firms totaling hundreds of billions of dollars. However, Goldman Sachs’ chief economist, Jan Hatzius, has stated that the actual impact of these investments on economic growth is minimal.
According to Hatzius, the majority of companies investing in AI are spending their money overseas, with significant manufacturing operations and raw material sourcing taking place abroad. This means that while US-based firms like Nvidia may be enjoying growth, the benefits of their investments are largely being reinvested in foreign markets.
TSMC, a leading Taiwanese semiconductor manufacturer, is a prime example of this phenomenon. As the primary supplier of chips for AI data centers, TSMC’s manufacturing facilities are located outside the US, and most of its output is destined for international markets. This has significant implications for the country’s trade balance and economic growth.
A substantial portion of the investment in building an AI data center goes towards purchasing computing components from TSMC, with a significant portion of these costs being incurred overseas. This underscores the point that while AI investments may be generating buzz, their actual economic impact is likely to be minimal.
The collective expected expenditure of the top five US tech companies on AI infrastructure in 2026 exceeds $700 billion and is likely to have a negligible effect on the country’s economic growth. In fact, only a fraction (0.2%) of the US economy’s 2.2% growth rate in 2025 can be attributed to AI investment.
There are several factors at play here, including profitability. Unlike traditional companies, which aim to maximize profits for shareholders, AI firms are often driven by the promise of future returns rather than current earnings. Consider OpenAI, widely regarded as one of the most capital-intensive startups in history, with an estimated $600 billion investment plan over the next decade.
While this investment may be driving innovation and pushing the boundaries of what is possible with AI, it comes at a significant cost to shareholders and investors. J.P. Morgan noted in November that AI firms need to generate substantial revenue (over $600 billion annually) to achieve a 10% return on their enormous expenditures on infrastructure.
The implications of this reality are profound. Not only does it suggest that AI firms may be more interested in promoting a vision of technological utopia than delivering tangible economic benefits, but it also raises concerns about their impact on productivity and competitiveness.
Historical precedent suggests that substantial investments in infrastructure often come at a cost to workers and the economy. If these companies risk sparking a recession by creating unsustainable bubbles around their stock prices, what happens when the music stops? The economic consequences of this scenario would likely be severe and far-reaching, potentially undermining the very foundations of the US economy.
As we navigate the complex landscape of AI investments and their economic implications, it’s essential to adopt a more nuanced perspective. While there are certainly benefits to investing in AI research and development, these need to be carefully weighed against the potential costs and risks associated with such efforts.
By examining this phenomenon through multiple lenses – including profitability, trade balances, productivity, and competitiveness – we can gain a deeper understanding of the role that AI is likely to play in shaping America’s future.