Fears of an AI bubble are growing, but some on Wall Street aren't worried just yet

The torrent of billion-dollar investment announcements related to artificial intelligence has raised fears that the economy is sitting on a bubble that, if popped, could send it into a tailspin.

The torrent of billion-dollar investment announcements related to artificial intelligence has raised fears that the economy is sitting on a bubble that, if popped, could send it into a tailspin.

Some on Wall Street aren’t buying it.

In a note to clients published Thursday titled “AI Spending Is Not Too Big,” Goldman Sachs economist Joseph Briggs made the case that the billions being spent on building out data centers — known as capital expenditures, or “capex” — remains sustainable.

In short: Briggs believes AI applications are leading to real productivity gains that will help boost companies’ bottom lines. Meanwhile, the cost of the computing processing needed to power those applications justifies the billions in spending, assuming the sophistication of the applications continues to improve.

In total, Briggs expects U.S. companies to generate as much as $8 trillion in new revenue thanks to AI.