Growing usage of AI tools has yet to boost productivity, or impact labour markets, according to Moody’s Ratings — and its uncertain impact is seen as a rising credit risk.
In a report released Monday, the rating agency said that while AI has been widely adopted — with 70% of firms now using the technology to some extent — its analysis of economic data found that there have been limited impacts on employment and productivity.
“Job creation has slowed across the economy since ChatGPT’s release,” it noted — but much of the decline in employment growth is due to “overlapping macroeconomic and policy shocks” — including the rise of remote work, tighter immigration policy and the sharpest monetary tightening in 40 years — rather than AI-driven effects, Moody’s said.
At the same time, the payoff from the adoption of AI tools has yet to show up in the productivity data, Moody’s reported — adding that large productivity gains will be needed to justify the vast investment in AI.
For instance, it calculates that U.S. productivity growth will need to rise by between 0.2 and 0.5 percentage points annually to offset the capital expenditure on AI to date.
“We estimate roughly US$1.5 trillion in hyperscaler capex deployed through 2026 requires US$335 billion — US$630 billion in new annual economic value creation — whether through business cost savings, extra consumer value, or entirely new markets — to break even on an economy-wide basis,” it said.
The pickup in productivity that’s required to clear this hurdle is “plausible given AI’s rapid advance,” it said. But there’s also “meaningful downside risk if the gains disappoint in scale or speed,” it warned.
Ultimately, disappointing productivity gains could trigger a drop in AI spending that drives a “contraction across the AI infrastructure ecosystem … and a more pronounced unwinding of stretched equity valuations,” the report said. “Given the scale of investment already committed, such a combination would likely weigh meaningfully on economic growth.”
Indeed, the prospect of an AI-driven market correction is already emerging as a “major credit risk,” according to Fitch Ratings.
In a research note on Monday, Fitch said that AI enthusiasm has been a major driver of U.S. equity markets, corporate bond issuance and economic growth over the past year — adding that the related wealth effect has also boosted consumer spending.
However, given the still-uncertain payoff from these investments, this is also becoming a growing credit risk.
“The combination of revenue uncertainty and the extent to which capital markets and economies have become intertwined with AI have created a vulnerability for credit in the event of a re-evaluation of long-run returns potential,” it said.
While there have already been temporary blips in certain tech stocks, “a larger, more protracted correction could have wider market, macro and credit effects depending on its scale, duration and contagion,” Fitch warned.