Artificial intelligence is providing a boost to consumption through a stock market driven by AI investments, despite growing concerns of a potential bubble.
Business investments in technology are rising sharply, with data centers emerging as a key area for construction. In the third quarter alone, three major tech companies reported a combined $78 billion in capital expenditures, nearly double from the previous year.
While some economists attribute over half of the US's 1.6% growth rate in the first half of 2025 to the AI boom, concerns about potential over-investment in this technology persist. The construction of data centers continues to be a bright spot, with spending projected to reach $41 billion annually by July.
Karen Dynan, an economics professor at Harvard University, states, “In a mechanical sense, it’s fair to say that AI has been the main driver of US GDP growth this year.” While the precise impact is debated, many economists believe the AI surge contributed significantly to the 1.6% growth rate in the first half of 2025, with expectations for continued momentum into the third quarter.
Proponents argue that this year marks just the beginning, positing that AI will enhance overall productivity and accelerate economic growth. Conversely, skeptics caution against excessive investment in AI before companies fully understand its applications, drawing parallels to previous periods of over-investment in new technologies.
Currently, AI spending and its related effects are prominent in the economy. Data centers symbolize the AI boom, with new facilities emerging nationwide. Major players like Meta Platforms Inc., Microsoft Corp., and Alphabet Inc.’s Google have increased their future spending forecasts following recent earnings reports. As of July, annual data center construction spending is around $41 billion, contributing positively to the building sector even if it accounts for less than 5% of total private construction.