The AI investment boom won't last forever, Goldman Sachs chief economist Jan Hatzius warns

The AI investment boom won't last forever, Goldman Sachs chief economist Jan Hatzius warns

Brian Sozzi · Executive Editor

Thu, September 10, 2026 at 3:25 PM GMT+3 2 min read

SAN FRANCISCO, Calif. — Nothing goes up and to the right forever on a chart, and that includes spending on artificial intelligence.

"It will not go on forever," Goldman Sachs chief economist Jan Hatzius said about aggressive AI spending at the firm's Communacopia & Tech conference (video above). "Of course, it's also possible that we'll find a lot of these investments are not productive. That's a downside scenario that you cannot exclude and rule out. But even in an environment where we have a positive basic verdict on, on this build out, there will be a slow down eventually."

The projections for AI infrastructure spending continue to be through the roof.

Global investment in AI infrastructure will hit a record $31.6 trillion through to 2050, according to baseline projections in PwC's new Global Data Centre Outlook.

On an annual basis, data center capital expenditures are forecast to rise from roughly $800 billion per year in 2026 to $1.8 trillion per year in 2050.

Companies from Meta (META) to Google (GOOG) to Microsoft (MSFT) are investing billions to support their AI ambitions.

PwC said AI infrastructure investment is expected to accelerate as chips and other internet-connected equipment require upgrades every few years.

"AI infrastructure is becoming one of the defining capital allocation challenges of the next generation," PwC global infrastructure leader of Australia Clara Cutajar said. "It cuts across technology, energy, real estate, supply chains, regulation and financing. This changes how infrastructure investors need to think about capital requirements, risk and returns."

Hatzius's baseline assumption is that AI spending "is sustainable, it's productive, it does contribute to stronger productivity growth in the future. So that's an optimistic view."

"That said," he added," when you have a build-out of a new technology, it's natural that even if the investments are mostly good ones, you have an investment phase during which the investment volume rises substantially. And then you have an exploitation phase where the new technology is used and the investments actually go down. And that's going to create some challenges, … and that's going to … have negative effects on people who've assumed that this boom is going to go on forever."

Brian Sozzi is Yahoo Finance's Executive Editor, host of the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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