Is AI hurting growth?

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The exuberance around artificial intelligence should be based on an expectation that investing today will generate higher economic output in the future. In that sense, AI is good for growth long term. The impact of AI investment on near-term growth is more mixed.
Any investment will raise GDP as it takes place—investment is one of the key components of GDP. The act of building a data center or conducting research creates economic activity from construction workers and programmers that will be recorded in the numbers. AI-related investment has helped raise current US growth.
But AI potentially lowers current growth by diverting resources. For instance, research by Bloomberg has shown that regional electricity prices can be pushed significantly higher by the power needs of data centers. Consumers who have to spend more on electricity will have less money to spend on other goods and services, reducing demand. Energy-intensive businesses will face higher costs.
Weaker demand and higher costs may cause some otherwise productive businesses to close. That risks creating a gap in the economic growth story, if businesses that are economically productive today close to allow the building of a sector that may be economically productive only in the future.