(Nov 12): Goldman Sachs on Wednesday forecast annualised spending on artificial intelligence-related hardware and intellectual property will climb to US$1.4 trillion (RM5.7 trillion) by the end of 2027, equivalent to nearly 4% of the US economy.

"AI will remain the dominant driver of business investment growth in 2027," the brokerage said, forecasting spending to exceed US$900 billion by the end of 2026.

The view comes amid concerns that rising borrowing costs and increased investor scrutiny could curb AI-related capital spending, particularly as companies lean more heavily on debt-funded expansion.

Democrats' victories in the US midterm elections earlier this month sparked concerns over tighter regulation of data-centre development, but Goldman Sachs said the outcome poses only limited risks to AI investment.

Goldman estimates AI-related investment will directly boost 2027 capex growth, including semiconductor investment by 5.3 percentage points and US GDP growth by 0.6 percentage points.

"Semiconductor investment is undercounted in the business investment statistics, and most information processing equipment is imported and is thus netted out of GDP," Goldman said.

Excluding semiconductor investment, AI-driven investment will boost 2027 capex growth by 4.3 pp and US GDP growth by only 0.2 pp, the brokerage said.

Overall, Goldman forecasts US business investment growth at 8% on a quarterly basis in 2027, nearly double the consensus forecast of 4.2%.

Uploaded by Magessan Varatharaja