Goldman Sachs raises $1 trillion question mark over Generative AI

Gen AI relevance: Generative artificial intelligence (AI) has stolen the limelight in various sectors, with many predicting it will revolutionise business. However, significant questions remain unanswered regarding its application and impact. A recent KPMG survey in the US revealed that while executives anticipate a substantial impact from generative AI, several of them feel unprepared for its immediate adoption.

The Goldman Sachs report has compounded the debate by raising a question on the massive investments in generative AI. As per the report, tech companies and other sectors may spend over $1 trillion on AI capital expenditure in the coming years, yet there are few tangible results to justify this spending. 
The experts whose views have been carried throughout the report have expressed skepticism about AI's short-term revolutionary impact. However, some remain hopeful about AI’s long-term economic potential and its capacity to deliver returns once a "killer application" emerges. 

The report concludes, "Despite concerns and constraints, there is still potential for the AI theme to persist, either through AI fulfilling its promise or due to prolonged market speculation."

Addressing AI’s productivity, Daron Acemoglu, Institute Professor at MIT and author of several books on technology and economics, suggested in an interview with Goldman Sachs that the productivity and growth benefits from generative AI in the US over the next decade may be more modest than many expect.