[ad_1]
MAny economist Generative artificial intelligence (A.I.) is transforming the global economy. A paper published last year by Ege Erdil and Tamai Besiroglu of the research firm Epoch argued that “explosive growth” was: GDP If you zoom up, “plausible” love It can widely replace human labor. ” Erik Brynjolfsson of Stanford University said he was hopeful. love “To drive a productivity boom in the coming years.”
To make this kind of economic transformation, companies need to spend a lot of money on new software, communications, plant, and equipment. A.I. Can be integrated into the production process. It took an investment boom to spread earlier breakthrough technologies, such as tractors and personal computers, throughout the economy. From 1992 to 1999, American non-residential investments increased by 3%. GDPFor example, the main reason for this is additional spending on computer technology.But so far, there are few signs that love Splurge. Around the world, corporate capital spending (or “capex”) has been significantly weaker.
After slow growth in the years before the COVID-19 pandemic, capital investment increased as lockdowns were lifted (see chart). By early 2022, it was rising at an annual rate of about 8%. A mood of technology optimism gripped some companies, while others looked to strengthen their supply chains. Capital investment subsequently slowed in the second half of the year due to geopolitical uncertainty and rising interest rates. On the eve of the release of OpenA.I.‘s GPT-4 in March 2023, and global capital investment spending was growing at about 3% per year.
Today, some companies are once again ramping up capital spending to seize what they see as big opportunities. love. This year, forecasters expect Microsoft’s spending (including research and development costs) to likely increase by nearly 20%. Nvidia stock is expected to rise more than 30%. “A.I. It will be our largest investment area in 2024, both in engineering and computing resources,” Meta boss Mark Zuckerberg reported late last year.
But in other regions, plans are more modest.Exclude companies that promote A.I. revolutions such as Microsoft and Nvidia; S&P 500 companies plan to increase their capital spending by only about 2.5% in 2024, or an amount that is in line with inflation. The situation is even more dire when looking at the economy as a whole. The U.S. capital expenditure “tracker” created by bank Goldman Sachs not only provides a complete picture of companies’ spending, but also hints at their future intentions. It is currently down 4% compared to the previous year.
Indeed, with all the excitement around generative; A.I.Is spending on information technology at least surging given the possibility of this? Not quite. In the third quarter of 2023, U.S. companies’ investment in “information processing equipment and software” decreased by 0.4% compared to the same period last year.
Similar trends are observed at the global level. According to national accounts data, OECD In the club of mostly rich countries through the third quarter of 2023, growth in investment spending, including government, has slowed compared to pre-pandemic years. A high-frequency measure of global capital spending by another bank, JPMorgan Chase, shows minimal growth. Real-time measurements from a survey of purchasing managers show that capital spending is weak, so it’s no surprise that there are few signs of productivity improvement (see chart).
Japan’s official survey reliably points out that, after years of stagnation, growth in capital investment will pick up significantly in the future. However, this likely reflects country-specific factors, such as corporate governance reforms. And in most areas outside the United States, the situation is less encouraging. The deteriorating outlook for Europe’s economy also doesn’t help. Investment intentions of European Union services companies are less than half of their ambitious levels at the beginning of 2022. British companies plan to increase capital spending by just 3% next year, compared to 10% when he asked in early 2022.
These trends suggest one of two things. The first is generative A.I. It’s a bust flash. Big tech companies love technology, but they’ll have a hard time finding customers for the products and services they’ve spent tens of billions of dollars developing. This is not the first time in recent history that engineers have overestimated the demand for new innovations. Think about cryptocurrencies and the metaverse.
The second interpretation is less pessimistic and more likely. Introducing new commodity technologies tends to take time. Returning to the computer example. Microsoft released its breakthrough operating system in 1995, but it wasn’t until the late 1990s that American companies increased their spending on software. According to Goldman Sachs analysis, only 5% of CEOs expect A.I. Of those who said they would see a “significant impact” on their business within one to two years, 65% said they would see an impact within the next three to five years. A.I. There is still potential to change the economy, but it will be a whisper rather than an explosion. ■
[ad_2]
Source link
