Goldman Sachs says AI capex boom has limited GDP effect and moderate crowding-out risk

Traders Union
All News
Financial News
Goldman Sachs on AI capex

Highlights

Goldman Sachs estimates that the AI investment surge will shave only 0.1 percentage point off 2026 U.S. GDP growth through indirect effects.
Around $50 billion of incremental crowding-out from AI spending is expected in 2026, but its effect on broader economic activity remains limited.
Goldman notes that AI-driven spending concentration is moderate, largely due to hyperscalers with strong cash flow and substitution from other business services.

Goldman’s view on AI spending

As reported by Business Insider, Goldman Sachs says both bullish and bearish interpretations of the AI capital spending surge overstate its economic impact. In a note published Tuesday, U.S. economist Jessica Rindels wrote that claims that AI is making a very large contribution to U.S. GDP growth, while also crowding out a great deal of other activity, are exaggerated.

Goldman analysts have remained positive on AI as an investment theme this year, but Rindels’ team says its macroeconomic effect looks smaller than headline figures imply. The bank draws a distinction between what appears in GDP statistics and the broader economic reality, noting that many companies are buying imported AI equipment and that official data does not fully capture other AI-related activity.

Rindels said Goldman estimates that indirect AI effects, including roughly $50 billion of incremental crowding-out in 2026, stock market wealth effects on consumer spending, and pressure on real income from higher electricity and other prices, would shave about 0.1 percentage point off the impact on 2026 GDP growth.

Implications for markets and other investment themes

Goldman argues that a more modest contribution to headline growth also means AI is not dominating the wider economy to the degree some skeptics fear. Rindels’ team examined whether AI spending is making it harder or more expensive for other businesses to invest, and found the crowding-out effect appears limited so far.

She said there is some evidence that AI is absorbing capacity in areas such as technology, construction, and borrowing. Even so, Goldman says other parts of the market and the economy remain less concentrated on AI than bearish commentary suggests.

According to Rindels, the moderate effect reflects the fact that much of the spending has come from hyperscalers with ample cash flow and that some companies are replacing spending on other intermediate business services with spending on AI services.

In our earlier article on the AI investment surge, we covered David Rosenberg’s argument that unusually heavy corporate spending on AI is propping up U.S. growth even as parts of the broader economy weaken. He estimated that AI-related items now account for roughly half of corporate investment and warned this concentration could drain capital from “old economy” sectors such as housing, while rising credit stress could become an early warning signal for the trade.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.