Investors are pricing in a 32.6% AI productivity boost for software engineers

Economists from UC Berkeley and LSE used stock movements to estimate that between November 2022 and December 2025 the market priced in a permanent 32.6% productivity increase in software engineering from AI. Their model implies a 3.61% present-value GDP increase. The authors warn markets can be overly optimistic.

• Estimate based on how stocks of firms with large software engineering payrolls react to AI news
• The 32.6% gain is comparable to 21-56% task-level accelerations reported elsewhere
• Model implies a permanent 3.61% present-value GDP increase
• Authors caution market expectations may not fully materialize