Goldman Sachs forecasts $1.4 trillion annual AI spending pace by end of 2027

Goldman Sachs expects AI to remain the main engine of US business-investment growth in 2027, with spending on AI-related hardware and intellectual property reaching a $1.4 trillion annual pace by year-end. The forecast, reported by Reuters on November 12, puts the buildout at nearly 4% of the US economy—but not an equivalent contribution to economic growth.

The bank issued its forecast on November 11. It expects annualized spending to exceed $900 billion by the end of 2026 before reaching the higher level a year later. Those are spending rates at each year’s end, rather than totals already spent or a forecast of cumulative spending across the two years.

A spending boom is not the same as a GDP boost

Goldman identifies two accounting issues behind that distinction. Semiconductor investment is undercounted in business-investment statistics, it says. Meanwhile, most information-processing equipment is imported, so its value is netted out when calculating gross domestic product, the measure of domestic economic output.

Including semiconductor investment, Goldman estimates that AI-related investment will directly add 5.3 percentage points to capital-expenditure growth in 2027. Capital expenditure is business spending on long-term assets. The corresponding estimated addition to US GDP growth is 0.6 percentage points.

Excluding semiconductor investment, the estimated contributions fall to 4.3 percentage points for capital-expenditure growth and 0.2 percentage points for GDP growth. These are additions to growth rates, not estimates of AI’s share of the economy. The distinction keeps the headline spending figure separate from the domestic growth it is expected to generate.

Two estimates of AI’s direct growth contribution

010.6 percentage points

Including semiconductor investment

Goldman’s estimated direct addition to US GDP growth in 2027, including semiconductor investment.

020.2 percentage points

Excluding semiconductor investment

Goldman’s estimated direct addition to US GDP growth in 2027, excluding semiconductor investment.

An investment outlook well above consensus

For overall US business investment, Goldman forecasts growth of 8% on a quarterly basis in 2027, compared with a consensus forecast of 4.2%, according to Reuters. That is nearly twice the consensus estimate. AI’s expected dominance sits within that stronger overall investment outlook, rather than being a forecast for the technology sector alone.

The forecast comes as higher borrowing costs and closer investor scrutiny raise concerns about AI capital spending, particularly as companies rely more heavily on debt to expand. Those financing concerns form the backdrop to Goldman’s projection, not evidence that the expected spending has already occurred.

Democratic victories in the US midterm elections earlier this month also prompted concerns about tighter regulation of data-center development. Goldman judges the election outcome to pose only limited risks to AI investment. That assessment is specific to the political outcome; it does not remove the financing pressures surrounding the buildout.