AI Spending Is Eating the US EconomyView all comments (0)0“So far this year, AI capex, which we define as information processing equipment plus software has added more to GDP growth than consumers’ spending,” reports Renaissance Macro (via Luke Kawa).The massive amount of money being poured into these projects by Big Tech represent, according to one data center expert, “an extraordinary challenge and a gamble.”To understand just how big a challenge this is,The Financial Times reports, “America needs to find an extra 45GW for its data farms, equivalent to about 10% of all current US generation capacity, or 23 Hoover Dams.”And to understand the thinking behind the gamble,Business Insider reports, “In the minds of tech CEOs, getting AI right is a binary proposition. If they get it right, they get to survive and thrive as the tectonic plates shift; if they get it wrong, it’s the end.”As Joe Brusuelas points out, investors are making a huge gamble of their own. “Investors are anticipating a surge in productivity with the arrival of AI. But should this buoyant view fall even just a little short, there is risk that equity valuations will need to adjust lower, reflecting the fundamental condition of the real economy.”AI Spending Is Eating the US EconomyView all comments (0)0Latest commentsInstall Our AppScan QR code to install appRisk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.© 2007-2025 - Fusion Media Limited. All Rights Reserved.