Power Hungry Al and Economic Growth

Artificial Intelligence (AI) has emerged as a key driver of economic growth and productivity. Its rapid advancement presents both unprecedented opportunities and complex challenges.

- Madhusudhanan S

AI is now a central force shaping the technological, organizational, and societal transformations of the 21st century.

However, progress comes at a cost— and AI is no exception. particularly its energy consumption, call for a coordinated response from both public and private sectors to ensure the sustainable use of AI technologies. This article explores AI’s relevance to economic growth, the implications of its energy demands, the challenges it poses, and offers a conclusion on balancing these dynamics.

AI's Role in Economic Growth

A report by Goldman Sachs, “The Potentially Large Effects of Artificial Intelligence on Economic Growth” (March 26, 2023), suggests that AI could impact up to 300 million jobs globally and automate around 25% of the world’s labor market. The study also notes that AI’s effects will likely be more pronounced in advanced economies compared to developing ones.

AI is expected to bring a dual impact: it may disrupt employment patterns but also significantly enhance labor productivity. Goldman Sachs projects that AI could contribute to a 7% annual increase in global GDP over the next decade. While the economic benefits are substantial, potential job displacement remains a key concern.

A more recent study by PricewaterhouseCoopers (PwC), “Value in Motion” (press release dated April 19, 2025), forecasts that AI could boost global GDP by up to 15% over the next decade due to its rapid development and widespread adoption.

Together, these studies underscore AI's transformative potential in driving productivity, streamlining operations, and enabling data-driven decision-making.

Power-Hungry AI