Just one year ago Goldman Sachs was an unrepentant cheerleader of Generative AI, touting the benefits it would provide to businesses as well as entire nations

Goldman suggested adopting Generative AI would provide a $7T increase in global GDP, and increase worker productivity by 1.5% over the next ten years. It could potentially automate as much as two thirds, of US occupations. Goldman further suggested Generative AI will have profound implications for disparate markets such as global enterprise software, healthcare and financial services. The total market for Generative AI was estimated to be $150B, with significant progress in adoption being made in disparate areas such as software development and the development of drugs. But

what a difference one year can make

as last week Goldman effectively wound down their somewhat over the top enthusiasm, asking if the proposed $1T of Capital Expenditure, Capex

will ever generate a positive return on investment?

some high level quotes

to help you get an idea of Goldman’s newly revised view

“Given the focus and architecture of generative AI technology today truly transformative changes won’t happen quickly and few — if any — will likely occur within the next 10 years”

“AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do”

the research went on to note

only a small number of tasks could be effectively automated by Generative AI, and goes on to forecast the use of this technology would only increase productivity by 0.5%, and GDP by 0.9%, but both over the coming decade. The research continued

suggesting the cost of AI

will not fall as rapidly as originally forecast, further noting that any efficiency gains a company might realise would disappear due to competition. And Goldman’s research closed with

critical questions about AI and The Power Grid

suggesting widespread adoption fo Generative AI would drive an increase in power consumption which The US and Europe “hasn’t seen for a generation”.

this is an interesting and objective

piece of research, one that it is difficult to believe won’t impact share prices, if not in the near term then definitely across the intermediate term. The complete research can be found here

and while I certainly am not saying I told you so, well, maybe I am. I never bought into The AI hype

simply because I have professional knowledge of the technology, and as soon as Open AI’s GPT 2.0 was released in 2018, I rapidly became a full on adopter. It was