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Over the next 10 years, AI could increase productivity by 1.5 percent per year. And that could increase S&P500 profits by 30 percent or more over the next decade, Goldman Sachs says.

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Goldman Sachs is bullish about artificial intelligence and believes the technology could help drive S&P 500 profits in the next 10 years.

"Over the next 10 years, AI could increase productivity by 1.5% per year. And that could increase S&P500 profits by 30% or more over the next decade," Goldman's senior strategist Ben Snider told CNBC Thursday.

The emergence of ChatGPT, the chatbot developed by OpenAI, has spurred a firestorm of interest in AI and the possible disruptions to the daily lives of many. It has also injected fresh excitement among investors eager for a fresh driver of profit growth at a time when rising borrowing costs and supply chain problems have tempered optimism.

"A lot of the favorable factors that led to that expansion (of S&P 500) earnings seem to be reversing," Snider told CNBC on "Asia Squawk Box."

"But the real source of optimism now is productivity enhancements through artificial intelligence."

"It's clear to most investors that the immediate winners are in the technology sector," Snider added. "The real question for investors is who are going to be winners down the road."

He pointed out that "in 1999 or 2000 during the tech bubble, it would be very hard to envision Facebook or Uber changing the way we live our lives."

Snider recommended that investors should spread their U.S. equity investments in cyclical and defensive sectors, touting the energy and the health-care sectors for their attractive valuations.

In the shorter term, he said he expects the U.S. Federal Reserve has completed most of its monetary policy tightening.

"The question is: In which ways will that continue to affect the economy moving forward?" Snider said. "One sign of concern in the recent earnings season is that S&P 500 companies are starting to pull back a bit on corporate spending."

Elevated interest rates could be one reason, he said.

"If interest rates are high, as a company, you might be a little more averse to issuing debt and therefore you might pull back on your spending. And indeed if we look at S&P 500 buybacks, they were down 20% year-over-year in the first quarter of this year that is one sign perhaps we haven't seen all the effects of this tightening cycle."

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Goldman Sachs says A.I. could push S&P 500 profits up by 30% in the next decade - CNBC