AI Economics

Goldman Sachs has forecast a 7 percentage point decline in Big Tech return on equity, citing AI capital expenditure that has not yet translated to measurable business returns. The bank published an AI spending and profitability report alongside the bearish ROE forecast, signaling institutional concern about the current AI investment cycle. Markets are now pricing in near-term derating of AI infrastructure stocks as margin compression outpaces revenue uplift.

Nobel laureate Daron Acemoglu argues AI will give only a modest productivity boost and won't eliminate human work, colliding with equity valuations built on transformative automation assumptions. The disconnect sharpens as CPI runs at 3.8%, gasoline costs rise $857 per household, and consumer sentiment deteriorates among the income cohorts most likely to buy AI tools.