AI Infrastructure Boom Drives US Economic Growth Amid Slowdown Warnings
AI investments drive 39% of US real GDP growth, with tech giants pouring $800 billion into infrastructure. Experts warn a potential slowdown risks market downturns and broader economic impacts.
The artificial intelligence race has reached a point where it is difficult to separate the technology industry from the global economy. The five major American tech giants are expected to invest approximately $800 billion this year in building AI infrastructure, including data centers, chips, and computing systems. These investments are already driving economic growth, meaning a significant slowdown in the race could be felt far beyond Silicon Valley.
The Impact on GDP Growth
This concern is far from theoretical. An analysis by the Federal Reserve Bank of St. Louis found that AI-related investments accounted for approximately 39% of US real GDP growth in the first nine months of 2025. Massive investments in artificial intelligence affect the broader economy well beyond the companies developing the technology.
When companies spend hundreds of billions of dollars on chips, data centers, electricity, and infrastructure, the capital flows to suppliers, contractors, and employees. These workers subsequently spend a portion of their income on other goods and services, creating a chain reaction of economic activity where initial outlays boost demand and revenues across a wide range of sectors.
Potential Scenarios and Warnings
"Even if the development of new models halts, the utilization of existing models can still expand and improve productivity." — David Minarsch, CEO of Valory
On the other hand, a slowdown does not necessarily mean a collapse. David Minarsch, CEO of Valory, argues that even if the development of new models stalls, the deployment of existing models can still expand and enhance productivity. Other experts note that numerous companies and organizations are still in the early stages of adopting AI tools.
However, the adverse scenario could be severe. The International Monetary Fund (IMF) estimated that a reversal in AI investments could trigger a roughly 20% decline in the US stock market, tighten credit conditions, and reduce US GDP by 1.5% relative to the baseline forecast.
Additionally, the Bank for International Settlements (BIS) warned that lower-than-expected returns on AI investments could transform the current investment wave into a market crash. For Western nations at the forefront of the AI race, such a scenario could lead to reduced investments, lower consumption, and diminished employment, ultimately compromising their technological edge against China, particularly if Beijing continues investing while the West decelerates.
