Artificial intelligence has enormous potential to transform the economy, but its real impact on productivity will only become tangible after several years. Jim Reed, Head of Macroeconomic and Thematic Research at Deutsche Bank, emphasizes that in his entire career, he has never seen a technology capable of so radically increasing labor efficiency. However, the key challenge lies not in AI itself, but in the speed of its integration into business processes.
Reed notes that companies will need time to adapt their infrastructure and restructure workflows. After the recent rally in AI sector stocks, a correction is possible, but the long-term trend will remain unchanged. The adaptation period, in his view, will be accompanied by high volatility and a reassessment of expectations, which is typical of any technological revolution.
Jobs at risk? Expert reassures
One of the most controversial issues is AI's impact on employment. Reed is confident that mass job losses will not occur. History shows that previous technological breakthroughs, from the steam engine to the internet, sparked similar fears but ultimately only increased labor efficiency without reducing overall employment levels. AI will become a tool, not a replacement for humans.
Separately, the expert analyzes inflation risks. Over the last 250-300 years, the adoption of new technologies has boosted productivity but has not led to a sustained decline in inflation. Reed warns that increased business efficiency through AI may be accompanied by additional inflationary pressure, especially in the early stages.
Investments grow faster than returns
Analysts at Deutsche Bank, in their annual World Outlook review, note that the current pace of AI development is highly likely to lead to noticeable productivity growth, but real results will only emerge after 2026. Meanwhile, investment in AI infrastructure is rapidly increasing: the consensus forecast for capital expenditures by the largest tech companies this year is $527 billion, significantly higher than the previously expected $465 billion.
Goldman Sachs also observes that investments are outpacing measurable economic impact. According to their estimates, in 2026, AI spending will add only 0.3 percentage points to real GDP growth and 0.1 percentage points to measurable growth. This confirms that we are in a phase of infrastructure accumulation rather than mass returns.
Earlier, experts from the Bank for International Settlements drew similar conclusions, pointing out risks to the financial system due to the AI boom.
My comment: The current situation resembles the early stages of the internet era: huge investments, a speculative bubble, but ultimately fundamental changes in the economy. However, investors should prepare for volatility: real returns from AI will not come until 2027-2028, and in the meantime, the market will reassess expectations.