What Investment Data Implies about the AI Transition

Jessica Wachter and Jonathan D. Wachter

No 35290, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Five U.S. technology firms account for the majority of AI infrastructure investment, spending $404 billion (2022 dollars) in 2025, with nearly double that forecast for 2026. These firms risk bankruptcy unless expected profits grow commensurately. We embed this observation in a two-sector model with rare productivity booms. We calibrate the boom size to investment through 2026, implying that AI-sector productivity roughly tripled. We then add a two-year window with a 50% annual probability of another such boom. The implied GDP gain by 2030 ranges from 7% to 53%, with AI shares of GDP ranging from 8% to 36%.

JEL-codes: E22 G12 O33 (search for similar items in EconPapers)
Date: 2026-06
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