Goldman Sachs has dismissed fears of an AI-driven market bubble, stating that the artificial intelligence boom is still in its early stages. In a new report released on Wednesday, analysts at the investment bank said current spending on AI remains modest when compared to the long-term economic potential of the technology.
The report estimates that U.S. AI-related investments account for less than 1% of GDP. In contrast, previous technology booms such as railroads, electrification, and the internet era peaked at 2% to 5% of GDP. Goldman expects AI investment to rise to $300 billion by 2025, citing continued improvements in productivity and expanding enterprise adoption.
The firm outlined two main reasons behind its optimistic outlook. First, AI deployments across existing sectors are already producing measurable productivity gains. Second, these gains depend on large-scale compute infrastructure, which justifies current investments in chips, servers, and data centers.
According to Goldman Sachs, generative AI could eventually add up to $20 trillion to the U.S. economy, with $8 trillion flowing to businesses as capital income. The bank projects that labor productivity could rise by 15% over the next decade once AI tools become widely adopted.
However, the report also pointed out a potential risk. It remains uncertain whether the companies investing most heavily in AI today will benefit the most in the long run. Past infrastructure cycles show that early entrants often built costly systems that were later acquired cheaply by more successful latecomers. The rapid depreciation of AI hardware and the fast pace of model development could make similar outcomes likely.
Despite that, Goldman believes the current environment still favors further AI investment. The firm expects spending to stabilize over time as the industry moves beyond the infrastructure build-out phase and hardware prices decline.
In related AI news, Google has recently introduced the Gemini 2.5 Computer Use model, featuring human-like web browsing and real-time interaction capabilities. Meanwhile, Alibaba has unveiled a massive 1-trillion-parameter AI model designed to rival ChatGPT and Google Gemini in scale and performance.