Musk Predicts AI Will Double US GDP Growth to 4%

Tesla CEO Elon Musk posted on X predicting that AI will boost US GDP growth from 2% to around 4% next year. This optimistic forecast contrasts sharply with mainstream economic views.

Morningstar expects US economic growth to slow, with the Fed's continued rate hikes adding uncertainty. Apollo Global Management estimates US AI capital spending could reach about 3% of GDP from 2027 to 2029, while Moody's expects tech companies' chip and data center spending to approach $1 trillion in the same period.

Apollo chief economist Torsten Slok notes AI-related capital spending has risen from 0.6% of GDP three years ago to about 3%. But history shows a lag between investment and productivity gains, as seen in the 1990s internet boom which took years to translate into economy-wide productivity growth.

The Fed has raised its benchmark rate to 4.00%, and Goldman Sachs expects another hike in October. Analysts say higher rates won't stop big tech from investing heavily in AI infrastructure, but may make it harder for smaller firms to raise AI funding.