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Agentic AI's Growth Halted by Physical Limits, Says Goldman Sachs

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The constraint in AI development is moving away from memory and processors, as agentic AI becomes more prominent, as stated by Goldman Sachs.GS.

The development of agent-based AI encounters "important physical limitations," according to the investment bank's analysts.saidin a report released on May 13, it was noted that there are constraints on data center capacity, an anticipated decrease in U.S. power generation, a lack of trained grid personnel, restricted available land, and extended lead times for materials such as steel.

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Goldman states that agentic AI consumes 60 to 130 times more energy than AI chatbots, according to a report from the Korea Advanced Institute of Science & Technology in June 2025.study. 

The development of agentic AI by 2030 would necessitate the U.S. generating an extra 72 gigawatts of electricity, which is comparable to the output of 72 major nuclear power plants, according to analysts from Goldman Sachs. This would also require an additional 760,000 grid workers and 207,000 skilled transmission and distribution professionals, they noted.

The market is overly concentrated on data centers and semiconductors, and has not yet acknowledged these limitations, according to Goldman. They pointed out a ninefold variation in earnings before interest and taxes among chip producers, memory and server firms compared to power, component, and data center service companies.

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"Numerous investors continue to aim for recreating previous achievements in data centers, overlooking the essential bottlenecks that will shape the upcoming stage of expansion," they stated.

Goldman Sachs' statement arrives at a time when memory and chip companies, including SanDisk Corp., are being discussed.SNDK, Seagate Technology Holdings STX, and Micron Technology Inc.MUhave been among the top performers this year, achieving high triple-digit percentage increases so far this year.

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This article The Progress of Autonomous AI Encounters 'Important Physical Constraints' and It's Not About Memory or Chips, According to Goldman Sachs originally appeared on .

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