🚨 Let me tell you why this Goldman Sachs headline is the most dangerous one you'll read today.. Companies spent $450 billion on AI last year.. fired tens of thousands of people to "restructure around AI".. replaced entire departments with chatbots.. And Goldman Sachs just said it contributed basically zero to economic growth.. so where did the money go? > It went to Nvidia.. $130 billion in GPU sales.. Jensen is the only man on earth who got rich from AI that hasn't produced anything yet.. > It went to stock buybacks.. companies fired people, cut costs, reported "record profits" and bought back their own shares.. the money went UP not OUT.. Jesus! > It went to a bubble.. the same way crypto money went to Lamborghinis and not infrastructure.. AI money is going to valuations and not productivity.. here's the part that should terrify you.. They already fired the people.. Atlassian 1,600.. Meta 21,000.. Block 40%.. Amazon warehouses.. the jobs are already gone.. But the growth didn't come.. the productivity didn't come.. the revenue didn't come.. they burned the village to build a city that doesn't exist yet.. and Goldman Sachs just looked at the empty lot and said "there's nothing here"
This St. Louis Fed chart plots the contribution of data center investment (a core AI infrastructure category) to U.S. real GDP growth, showing only a few hundredths of a percentage point in recent quarters—evidence that despite heavy AI spending, the measurable boost to economic growth has been minimal so far.
Source: Federal Reserve Bank of St. Louis (St. Louis Fed)
Research Brief
What our analysis found
A viral tweet citing Goldman Sachs has reignited debate over whether the AI investment boom is translating into real economic value. The core claim — that companies spent roughly $450 billion on AI in a single year yet generated "basically zero" GDP growth — draws on a February 2026 Washington Post report summarizing Goldman's analysis. According to that analysis, the disconnect is partly mechanical: roughly three-quarters of a data center's cost consists of computer hardware and components that are largely imported, meaning the spending is subtracted from U.S. GDP calculations even as it enriches chipmakers abroad. Economist Joseph Politano separately estimated that AI-related spending contributed only about 0.2 percentage points to 2025 U.S. GDP growth — a far cry from earlier hype suggesting AI accounted for 39–92% of economic expansion.
The financial trail the tweet describes is broadly supported by data. Nvidia posted $130.5 billion in revenue for its fiscal year ending January 2025, ballooning to $215.9 billion the following fiscal year, almost entirely on the back of data-center GPU sales. Meanwhile, S&P 500 companies set a quarterly buyback record of $293.5 billion in Q1 2025, and the full year was on pace to approach $1 trillion in share repurchases. Nvidia itself returned $41.1 billion to shareholders through buybacks and dividends in FY2026 alone — underscoring the tweet's argument that capital flowed "up, not out."
The human cost cited in the tweet also checks out. Block cut roughly 4,000 jobs (~40%) in late February 2026 with its CEO explicitly citing AI-enabled efficiency. Atlassian eliminated ~1,600 roles in March 2026 to "self-fund" its AI pivot, and Workday cut 1,750 positions (8.5%) in early 2025 while redirecting investment toward AI. A February 2026 NBER survey of nearly 6,000 executives across four countries found that 89% reported no measurable impact of AI on labor productivity over the prior three years, with the average realized boost just 0.29%. Still, those same executives projected a +1.4% productivity gain and a −0.7% employment decline over the next three years — suggesting the story may not yet be over, even if the early returns are strikingly thin.
Fact Check
Evidence from both sides
Supporting Evidence
Goldman Sachs confirmed AI's near-zero GDP contribution
A February 2026 Washington Post report detailed Goldman's finding that AI investment spending made "basically zero" measurable difference to U.S. GDP growth in 2025, largely because imported hardware components are netted out of domestic output figures (Washington Post, Feb 23, 2026).
Nvidia revenues match the tweet's $130 billion figure
Nvidia reported $130.5 billion in total revenue for FY2025 (ending January 2025), overwhelmingly driven by data-center GPU sales, aligning precisely with the tweet's claim (Nvidia press release).
Stock buybacks hit record levels during the AI spending surge
S&P 500 buybacks reached a quarterly record of $293.5 billion in Q1 2025 — up 23.9% year-over-year — and S&P Dow Jones Indices projected full-year 2025 buybacks could approach $1 trillion (S&P Global, Jun and Dec 2025).
Major layoffs explicitly tied to AI restructuring
Block cut ~4,000 jobs (~40%) citing AI-enabled efficiency (AP, Feb 2026); Atlassian eliminated ~1,600 roles to fund its AI push (The Guardian, Mar 2026); Workday cut 1,750 roles while redirecting spending toward AI (Feb 2025).
Executives themselves report negligible productivity gains
An NBER survey of ~6,000 executives found 89% saw no measurable AI impact on labor productivity over the previous three years, with the average realized gain at just 0.29% (NBER Working Paper 34836, Feb 2026).
Global data-center capex confirms the spending scale
Dell'Oro Group reported global data-center capital expenditure surged 51% to $455 billion in 2024, and Omdia projected it would exceed $650 billion in 2025, corroborating the tweet's $450 billion figure (CIO Dive; The Register).
Contradicting Evidence
The GDP "zero" is partly an accounting artifact, not proof of waste
Goldman's own analysis acknowledged that roughly three-quarters of data-center costs are imported hardware, which is subtracted from GDP by definition — meaning the spending is real but misattributed geographically rather than nonexistent (Washington Post, Feb 2026).
An independent estimate puts AI's GDP contribution above zero
Economist Joseph Politano calculated that AI-related spending added approximately 0.2 percentage points to 2025 U.S. GDP growth — modest, but not "basically zero" as the tweet flatly states (Washington Post, Feb 2026).
U.S. labor productivity actually rose meaningfully in 2025
Bureau of Labor Statistics data showed nonfarm business labor productivity increased an average of 2.2% in 2025, above the pre-pandemic trend, complicating the tweet's claim that "the productivity didn't come" (BLS, Mar 2026).
Executives expect meaningful gains ahead
The same NBER survey that found 89% saw no current AI productivity impact also found executives project a +1.4% productivity boost and −0.7% employment reduction over the next three years, suggesting early-stage adoption lags rather than permanent failure (NBER Working Paper 34836, Feb 2026).
Buyback records are not unique to AI-era companies
S&P 500 buybacks have been trending toward record levels for years, driven by tax policy, low borrowing costs, and broad corporate strategy — attributing the trend primarily to AI-driven cost-cutting overstates a single cause (S&P Dow Jones Indices, 2025).
The crypto-to-AI comparison is misleading
Unlike cryptocurrency speculation, AI capital expenditure is building physical infrastructure — data centers, power systems, networking — with cumulative global construction costs projected at $2.9 trillion through 2028 (Morgan Stanley, Mar 2026), representing durable assets rather than speculative tokens.
Technology adoption historically shows long lag times before GDP impact
Economists have long documented that transformative technologies — electricity, the personal computer, the internet — took a decade or more to register in aggregate productivity statistics, making a single-year GDP snapshot a poor measure of AI's ultimate economic contribution.
Report an Issue
Found something wrong with this article? Let us know and we'll look into it.