How AI is Affecting GDP Growth, Productivity, and Jobs

AI investment currently contributes only about 0.1% to US GDP growth, significantly less than the narrative suggesting it drives half of recent economic expansion. Much of the capital expenditure on AI equipment, such as imported semiconductors, fails to register in domestic GDP calculations due to accounting treatments. While global AI investment is estimated at $1 trillion, it remains consistent with historical technological shifts when measured as a share of GDP. Regarding labor, AI adoption is in its early stages, with minimal current impact on employment. Over the next decade, AI is projected to boost productivity by approximately 15%, potentially raising long-term GDP growth to the mid-2% range. While some labor market disruption is expected, with a projected 0.5% to 1% increase in unemployment, historical trends suggest new job creation will likely offset these losses.