Elon Musk is betting that artificial intelligence will sharply accelerate the US economy.
In his view, AI could roughly double the rate of US economic growth next year—from around 2% to 4%.
"My guess is that AI will roughly double US GDP growth next year—from ~2% to ~4%. Maybe even more," Musk wrote on X (formerly Twitter, blocked in Russia).
This forecast comes amid a debate among investors over whether massive investments in AI infrastructure will translate into broad-based productivity growth—and how soon that might happen.
The scale of the investment boom is substantial. According to estimates by Torsten Sløk of Apollo Global Management, annual US capital expenditure related to AI could reach about 3% of GDP between 2027 and 2029, up from around 0.6% three years ago, reports Reuters Breakingviews.
US tech companies also plan to spend nearly $1 trillion on chips and data centers in 2027—according to Moody’s analysts cited by Reuters—compared to the roughly $165 billion expected from Chinese competitors.
While this spending directly stimulates economic activity, the key question is whether it can generate the productivity growth needed to sustain a 4% growth rate.
Historical technology booms suggest there can be a significant time lag between investment and economy-wide productivity growth. For instance, the internet boom of the 1990s took years to yield widespread productivity gains.
AI might evolve more rapidly. Companies are already deploying generative AI and increasingly autonomous agents in software development, research, customer service, and other areas. If these tools rapidly boost output per worker, the economic impact could materialize much sooner than in previous technological cycles.
However, mainstream forecasts remain far less optimistic.
Morningstar expects US economic growth to slow through 2027, rather than accelerate to Musk’s target of 4%. High interest rates could also complicate the outlook. The Federal Reserve raised its benchmark rate to 4.00% on September 16, and Goldman Sachs anticipates another hike in October.
While high rates are unlikely to deter major tech companies from making massive investments in AI infrastructure, they could make it harder for smaller companies and businesses across the economy to finance AI adoption.
Meanwhile, the American consumer remains a source of strength. Retail sales rose 1.2% in August compared to July—surpassing the expected 0.8% growth—while core retail sales climbed 1.4% against a forecast of 0.6%, Reuters reports.
Musk’s prediction also has an obvious financial angle. His companies—Tesla and xAI—have a direct stake in the continued expansion of AI, though he did not disclose these interests in his post, Reuters notes.
The discussion will be easier to evaluate as companies report their AI spending and data on productivity accumulates. If massive infrastructure investments begin to yield tangible results across the economy, Musk’s 4% growth forecast might seem less far-fetched.