Goldman Sachs Questions Gen AI: “It’s Most Decidedly Not the Future.”

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IBL News
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IBL News | New York

Goldman Sachs investment bank published a 31-page report titled “Gen AI: Too Much Spend, Too Little Benefit?” wonders if this technology is a bubble and states that this is “unreliable, unsustainable, requires an entire rebuild of America’s power grid, and is most decidedly not the future.”

“Tech giants and beyond are set to spend over $1tn on AI capex in coming years, with so far little to show for it. So, will this large spend ever pay off?” questions Goldman Sachs.

The investment bank states, “The technology isn’t designed to solve the complex problems that would justify the costs, which may not decline as many expect.”

“Even if it does, we explore whether the current chips shortage and looming power shortage will constrain AI growth.”

Goldman Sachs mentions that utility companies will have to spend nearly 40% more in the next three years to keep up with the demand from hyperscalers like Google and Microsoft.

It also adds that only about 5% of companies report using generative AI in regular production.

The report includes an interview with economist Daron Acemoglu of MIT, an Institute Professor who published a paperback in May called “The Simple Macroeconomics of AI” that argued that “the upside to US productivity and, consequently, GDP growth from generative AI will likely prove much more limited than many forecasters expect.”

Acemoglu declared that “truly transformative changes won’t happen quickly, and few—if any—will likely occur within the next 10 years.”

“AI’s ability to affect global productivity is low because “many of the tasks that humans currently perform are multi-faceted and require real-world interaction, which AI won’t be able to improve anytime soon materially.”