The AI spending boom is boosting US GDP — and potentially hiding looming problems

Fri, Aug 15, 2025, 10:07 AM 3 min read

• Big Tech's AI spending boom is so massive that it is boosting the US economy.

• Researchers at Pantheon Macroeconomics say it's not all good news.

• AI-related investments aside, the US economy is showing some signs of struggle.

The AI capex spending race is so massive that it's lifting up the entire US economy.

Researchers at Pantheon Macroeconomics found that AI-related spending accounted for a 0.5 percentage point difference in annualized GDP growth for the first half of the year. Without AI spending, Pantheon estimated the US economy would have grown at less than 1%, a sign that tech companies are propping up a not-so-great economy.

"Hidden behind the surge in AI-related spending, however, investment elsewhere in the economy is far softer than headline numbers suggest," Samuel Tombs, Pantheon's chief US economist, and Oliver Allen, Pantheon's senior US economist, wrote in their recently published report.

Tech companies don't appear to be slowing down their spending anytime soon.

Amazon, which spent $48.4 billion on capital investments in 2023, is set to more than double that amount this year. Google raised eyebrows with its pledge to spend an additional $10 billion. Microsoft recently reported that it too pledged to push capex spending ahead of analyst expectations. Even Apple, often regarded as the most frugal of the bunch, is exceeding its previous spending rate.

"Big tech's plans to continue spending aggressively on AI over the next few years suggest a similar boost over the rest of 2025 and into 2026," the analysts wrote.

Top CEOs, including Nvidia's Jensen Huang, have praised President Donald Trump's AI plan, which aims to further fuel investments in US spending.

As Business Insider previously reported, data center construction is skyrocketing. Beyond the sheer costs of construction, there are also significant expenditures related to the large amount of energy and water needed to power and maintain the data centers.

According to Pantheon's research, spending on software is what's really accelerating a big part of the GDP boost. Data center construction and energy spending are solid but not enough to "shift the dial" in the way software and, to a lesser extent, equipment-related spending have done so far. Since the US imports 80% of computer equipment, spending on it has a lesser net effect on GDP, where imports count against growth.

"We had thought the leap in tech equipment investment in Q1 mostly reflected a rush of pre-tariff purchases, but it held onto its gains in Q2 as imports of other goods retreated, suggesting a persistent climb," the analysts wrote.