Key Takeaways from Goldman Sachs' AI Report on Economic Growth

Goldman Sachs just released their AI report on economic growth.

They predict 300 million jobs will be lost to automation.

Here are the key takeaways everyone must know: pic.twitter.com/5J6aoqOSB4

— Alex Banks (@thealexbanks) April 4, 2023

1/ Labour market disruption

Generative AI has huge macroeconomic effects:

• 2/3 of current jobs are exposed to some AI automation
• 1/4 of current work could be substituted by generative AI
• 300 million jobs will be automated from extrapolating estimates

— Alex Banks (@thealexbanks) April 4, 2023

2/ Productivity boom

Worker displacement from automation has historically been offset by:

• New job creation
• Significant labour cost savings
• Higher productivity for non-displaced workers

AI could raise annual US labour productivity growth by 1.5% over a 10-year period.

— Alex Banks (@thealexbanks) April 4, 2023

3/ Investment in AI

Management teams of publicly-traded companies increasingly cite AI in earnings calls.

These indications of interest predict large increases in company capital investment.

In 2021 global private investment in AI totalled $94 billion—5x from 5 years prior. pic.twitter.com/j1TsHAaEPY

— Alex Banks (@thealexbanks) April 4, 2023

4/ Job automation

2/3 of US occupations are exposed to automation.

1/4 of current tasks could be automated by AI in the US.

High exposure to white-collar jobs:

• Administrative (46%)
• Legal (44%)

Low exposure to blue-collar jobs:

• Construction (6%)
• Maintenance (4%) pic.twitter.com/rNfWXYBRnV

— Alex Banks (@thealexbanks) April 4, 2023

5/ Substituting vs complementing the future of work

Most jobs are only partially exposed to automation.

Therefore they are more likely to be complemented rather than substituted by AI.

For current US employment:

• 7% → substituted
• 63% → complemented
• 30% → unaffected

— Alex Banks (@thealexbanks) April 4, 2023

6/ Productivity boost

AI-driven automation can raise global GDP through:

1. Freed-up capacity

Most workers are only partially exposed to AI automation.

Following AI adoption their freed-up capacity can be allocated to productive activities that boost their output by 2-3%/year

— Alex Banks (@thealexbanks) April 4, 2023

2. Re-employment

Workers that are displaced by AI will eventually be re-employed.

This will boost total output in new occupations from AI adoption.

For example innovations in tech introduced new occupations like webpage designers, software developers and digital marketers.

— Alex Banks (@thealexbanks) April 4, 2023

I feel the total impact will depend on the adoption timeline—society is generally slow at taking up new technologies.

Widespread AI adoption could drive:

• 7% ($7tn) increase in annual global GDP over a 10-year period
• US investment in AI to approach 1% of US GDP by 2030

— Alex Banks (@thealexbanks) April 4, 2023

I personally can't wait to see the enormous impact generative AI has on the economy.

We are entering a golden age and I'm excited to build.

Follow me @thealexbanks for more on AI.

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— Alex Banks (@thealexbanks) April 4, 2023

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— Alex Banks (@thealexbanks) April 4, 2023