Cathie Wood Says AI Could Drive Global GDP Growth Above 7%, Calls It ‘Conservative’

• Wood expects nominal GDP growth to reach 6% to 8% and sees long-term interest rates potentially reaching 5% to 7%.
• She also expects the shift toward electric transportation to reduce oil demand and eventually push crude prices toward $30-$35 a barrel.
• Wood said 7% growth could ultimately “look conservative in hindsight” if AI produces the productivity gains she expects.

ARK Invest founder Cathie Wood said on Friday that she sees the artificial intelligence boom driving a surge in global economic growth that could dwarf the gains generated by the Industrial Revolution, with real GDP growth potentially exceeding 7% annually over the next three to five years.

“We think that during the next three to five years, we will be seeing regularly and perhaps on average growth north of 7%,” Wood said in an interview with CNBC. “I actually think that 7% is going to look conservative in hindsight.”

Wood compared the outlook with the Industrial Revolution, when global real GDP growth rose to roughly 3% from about 0.6% in the preceding 400 years. She stated that the current technology cycle could produce an even larger boost because AI is developing alongside robotics, energy storage, blockchain technology and multiomic sequencing.

Wood-led ARK Invest’s flagship fund, ARK Innovation ETF (ARKK), edged 0.6% higher in pre-market trading. On Stocktwits, retail sentiment around ARKK trended in ‘bullish’ territory over the past day. 

Cathie Wood Sees AI Driving 7% Economic Growth

Wood’s bullish growth outlook is built around the idea that AI and related technologies could drive a sharp increase in productivity across the economy.

She said nominal GDP growth could reach 6% to 8%, with short-term interest rates potentially moving into a similar range. Wood sees long-term yields at 5% to 7%, pointing to the late 19th and early 20th centuries, when yield-curve inversions did not necessarily lead to recessions.

Wood added that faster productivity growth could also help economies grow out of their debt burdens rather than relying primarily on higher taxes.

Cathie Wood Sees Oil Falling to $30-$35

Wood also expects the AI and technology cycle to reshape energy demand. She noted that 57% of global oil consumption is tied to transportation and said the shift toward electric transportation will increasingly move energy demand from oil toward the power grid.

Wood said that shift could eventually push oil prices down to $30-$35 a barrel, stating that such levels could become sustainable rather than appearing only during periods of economic crisis.

U.S. West Texas Intermediate crude futures for October delivery fell about 2% to around $92 per barrel in pre-market trade on Friday, while November Brent crude futures declined roughly 1% to around $104 per barrel.

The United States Oil Fund (USO) dropped around 2.7% in pre-market trade. On Stocktwits, retail sentiment around the ETF trended in ‘bearish’ territory over the past day. 

Markets Head Into Friday Trading

U.S. equities gained in pre-market trade on Friday. The SPDR S&P 500 ETF (SPY) was up 0.29%, the SPDR Dow Jones Industrial Average ETF (DIA) gained 0.32%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 0.45% higher. Retail sentiment around SPY on Stocktwits shifted to ‘extremely bullish’ from ‘bullish’ territory over the past day. 

Through Thursday’s close, the Dow was down 0.6% for the week and was on track for a fourth consecutive weekly decline. The S&P 500 was up 0.7% for the week, while the Nasdaq had gained 1.6%.

Read also: Google To Send AI Chips Into Orbit Next Week Aboard SpaceX Rocket, Eyes Data Center In Space

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