From Fortune, October 7:
U.S. GDP growth in the first half of 2025 was almost entirely driven by investment in data centers and information processing technology, according to Harvard economist Jason Furman. Excluding these technology-related categories, Furman calculated in a Sept. 27 post on X.com GDP growth would have been just 0.1% on an annualized basis, a near standstill that underlines the increasingly pivotal role of high-tech infrastructure in shaping macroeconomic outcomes.
Furman’s findings, shared online and echoed by financial analysts including Robert Armstrong of the Financial Times‘ Unhedged (the same writer who coined the term “TACO trade’), echo several months of observations on the remarkable surge in data-center infrastructure. In August, Renaissance Macro Research estimated, to date in 2025, the dollar value contributed to GDP growth by AI data-center buildout had surpassed U.S. consumer spending for the first time ever. That’s remarkable considering consumer spending is two-thirds of GDP.
Technically, as Furman notes, investment in information-processing equipment and software was only 4% of U.S. GDP for the first half of 2025, yet it also accounted for fully 92% of GDP growth over that period. Furman added it’s probably not the case the U.S. economy would have recorded almost no expansion at all absent this buildout, reasoning that “absent the AI boom we would probably have lower interest rates [and] electricity prices, thus some additional growth in other sectors. In very rough terms that could maybe make up about half of what we got from the AI boom.” But still, it’s big.Tech giants such as Microsoft, Google, Amazon, Meta, and Nvidia have poured tens of billions of dollars into building and upgrading data centers, responding to explosive demand for artificial intelligence and large language models that require massive computing resources.
Lisa Shallet, chief investment officer for Morgan Stanley Wealth Management, flagged on Sept. 29 that spending was truly massive among the so-called “hyperscalers” who are striving for huge computing, storage and networking capacity.
“In recent years, hyperscaler capex on data center and related items has risen fourfold and is nearing $400 billion annually,” she wrote. “The speed of growth and size of the investment are skewing its aggregate economic impact, with the top 10 spenders accounting for nearly a third of all spending … For perspective, it’s estimated that data center-linked spending is adding roughly 100 basis points to U.S. real GDP growth.”....
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