New Technology / Ai Development
Track AI development, model progress, product releases, infrastructure shifts and strategic technology signals across the artificial intelligence sector.
Goldman's Weir Says Investors Are Wondering About AI ROI
Topic
AI Investment and Economic Impact
Key insights
- Investors are questioning AI ROI, shifting focus from capital expenditures
- Despite rising AI investments, capital formation as a share of GDP remains stable
- Earnings drive equity prices, with 80 to 90 percent of returns linked to earnings growth
- S&P 500 earnings growth is projected at 10 percent, supported by 2.4 percent real GDP growth
- Total S&P 500 returns are forecasted at 7 percent due to declining multiples
- Concerns about the software sector echo past market anxieties during crises
Perspectives
Discussion on AI's impact on jobs and investment strategies.
Pro-AI Investment
- Highlights significant capital inflows into AI despite investor concerns about ROI
- Claims earnings growth is the primary driver of equity prices
- Proposes that historical trends in market reactions to geopolitical shocks will repeat
- Argues that the US economys innovation is a key reason for recommending US assets
- Emphasizes that technological innovation is a feature of the US economy
- Notes that AI will boost productivity while also displacing jobs
Skeptical of AI's Impact
- Questions the sustainability of earnings growth amid rising AI investments
- Warns of potential investor anxiety and market volatility in the software sector
- Rejects the notion that current market conditions are fundamentally different from past crises
- Expresses concern about the skills mismatch in the workforce due to AI displacement
Neutral / Shared
- Acknowledges that geopolitical risks can impact market reactions
- Recognizes the historical patterns of market recovery after geopolitical shocks
Metrics
earnings_growth
10 percent %
projected earnings growth for the S&P 500
This growth is crucial for driving equity prices.
we think earnings growth for the S&P 500 will be about 10 percent this year.
jobs_lost
1 million units
jobs displaced by AI annually
Understanding the scale of job displacement is crucial for workforce planning.
AI may display some million jobs a year.
total_jobs
170 million units
total jobs in the US
This figure provides context for the scale of job displacement and creation.
There are 170 million jobs in the US.
jobs_lost_or_destroyed
25 to 30 million units
jobs lost or destroyed annually
This highlights the ongoing dynamics of job turnover in the economy.
Each year, there are about 25 to 30 million jobs either lost or destroyed.
Key entities
Timeline highlights
00:00–05:00
Investors are increasingly questioning the return on investment in AI, despite significant capital inflows into the sector. Earnings growth remains the primary driver of equity prices, with projections indicating a 10 percent growth for the S&P 500 this year.
- Investors are questioning AI ROI, shifting focus from capital expenditures
- Despite rising AI investments, capital formation as a share of GDP remains stable
- Earnings drive equity prices, with 80 to 90 percent of returns linked to earnings growth
- S&P 500 earnings growth is projected at 10 percent, supported by 2.4 percent real GDP growth
- Total S&P 500 returns are forecasted at 7 percent due to declining multiples
- Concerns about the software sector echo past market anxieties during crises
05:00–10:00
AI is projected to displace 1 million jobs annually, but new job creation is expected to offset this loss, resulting in a net positive effect on employment. The US economy's innovation and investment in data centers suggest resilience and growth potential in the equity market despite job displacement.
- AI is expected to displace 1 million jobs annually, but new job creation will maintain a net positive effect on employment
- The US economys innovation drives a strategic overweighting in US assets, indicating resilience despite job displacement
- Technological innovation suggests growth potential in the US equity market, even with job losses
- Investment in data centers and rising market prices boost consumer consumption and net worth
- Despite short-term AI adjustments, the long-term impact is bullish for the economy
- Job losses from AI will likely be offset by new opportunities, reflecting the concept of creative destruction