A new economic indicator has captivated Silicon Valley, Wall Street and Washington.
Technology companies’ massive spending on artificial intelligence accounted for half or more of U.S. growth last year, some economists calculated, effectively propping up an otherwise anemic economy.
To President Donald Trump and his advisers, the figures showed that AI is helping spark an economic renaissance that must not be impeded by regulation. To some critics, including Rep. Alexandria Ocasio-Cortez (D-New York), the data revealed an economy dangerously addicted to AI.
Either way, it became conventional wisdom that the technology was now a major engine of growth in the world’s largest economy.
But a growing number of forecasters now say the economy’s dependence on AI was overstated.
Prominent economists, including from Morgan Stanley and JPMorgan Chase, calculate that the AI buildup was directly responsible not for 92 percent or 39 percent of gains to the U.S. economy in 2025, but as little as zero.
“It was a very intuitive story,” said Joseph Briggs, who jointly leads global economics investment research at Goldman Sachs. “That maybe prevented or limited the need to actually dig deeper into what was happening.”
Briggs and his Goldman Sachs colleagues recently said that investment spending on AI made “basically zero” difference in U.S. economic growth last year.
It’s clear that the huge spending on AI is adding to the U.S. economy, but the available economic data doesn’t neatly capture its effects. The debating economists and the slippery data suggest that if the technology does start to reshape the economy, it may be challenging to detect and clearly measure. That may leave political and corporate leaders to choose the numbers that fit their preferred narratives on how AI is changing American life and work.
The struggle to even measure what is happening today suggests there may be years of bickering ahead over whether AI is creating a golden age of prosperity or a path to mass unemployment and impoverishment.
The high-stakes quibbling over AI’s current economic impact largely hinges on how to account for the foreign-made computing equipment and components inside the expensive data centers that AI companies are building across the nation.
Economists who argue that AI’s contribution to U.S. growth is overstated calculate that much of the money spent to equip AI data centers drags down economic growth rather than boosting it.
That’s because the $31 trillion in yearly U.S. gross domestic product, the widest measure of the economy, tallies only the final value of products and services produced domestically. Spending on imports and foreign made components is subtracted because it boosts the economies of other countries, not that of the United States.
If a U.S. store paid $500 for a sofa made in China and sells it for $1,000, U.S. GDP mostly records the $500 difference, said Hannah Rubinton, an economist at the Federal Reserve Bank of St. Louis. The sale of a $50,000 American-made truck with $10,000 worth of foreign parts counts as a $40,000 lift to the U.S. economy.
Roughly three-quarters of the cost of an AI data center is for the computer gear and parts such as computer chips that go inside of it, technology analysts estimate. America’s AI champions, including the computer chip pioneer Nvidia, manufacture many of their products in Asia — despite efforts by the Biden and Trump administrations to reduce U.S. dependence on essential chips made overseas.
Other economists say the contrarians are too pedantic and looking too narrowly at AI’s contribution to the economy. And some forecasters say that the U.S. government’s economic data is a poor measure of the impact of AI and that alternative calculations show the current boom is an even bigger boost to economic growth.
But even some of those not in the AI-zero camp agree that the narrative of the technology propping up the economy was overblown.
“This is a big deal, but not the be-all and end-all,” said Joseph Politano, an economic analyst who writes the Apricitas Economics newsletter. He calculates that AI-related spending contributed about 0.2 percentage points to the 2.2 percent U.S. economic growth last year.
Politano said that it’s rare to strip out import costs when calculating the boost from individual sectors of the economy. But AI “is a special case, because so much is imported,” he said.
There’s no denying that there’s a massive AI spending splurge underway. Across the country, hundreds of hulking warehouses are sprouting up and being stuffed with expensive, AI-calculating computing equipment.
Five leading U.S. technology companies are expected to spend a combined $700 billion this year on AI infrastructure and other major projects, an outlay about the size of Sweden’s entire economy. The construction is employing armies of workers and has spiked demand for land, cement, computer chips, turbines and much more.
This work to lay the foundation for future AI is the most tangible evidence of the technology’s economic impact so far. It’s more difficult to measure what, if anything, business and consumer use of AI is doing to economic growth.
The AI buildup is putting real money into the pockets of some Americans and U.S. businesses. Stock market gains from AI enthusiasm are plumping up Americans’ investment portfolios.
“The two engines of today’s economy are the AI ecosystem and wealthy consumers,” Richmond Fed President Tom Barkin said in a January speech.
Joe Brusuelas, chief economist at RSM US, a tax and consulting firm, said the naysayers on AI’s economic effects are right on the details but fail to reflect the bigger picture.
He expects more recalculations of AI’s role in U.S. growth to be needed as new and revised measures of what the economy did in 2025 come in. “We’re all trying to peer through the fog here on what is driving growth,” he said.
And he argues that the narrow debate about how to calculate AI’s contribution to growth risks overshadowing more important questions about the effects of massive AI spending. “They’re on the mark but missing something much larger happening in the economy,” Brusuelas said.
Rubinton at the St. Louis Fed co-wrote an analysis that concluded AI-related business spending contributed about 39 percent of U.S. economic growth through the first nine months of 2025.
She stands by that calculation but acknowledges that it is probably the maximum possible economic boost related to AI. The tally included spending on software, computers and research that wasn’t necessarily all related to AI. On Friday, after the release of a government estimate of economic growth for all of 2025, Rubinton said her analysis broadly stood.
Rubinton said she generally agrees with the broader point made by the people calculating little to no economic boost from the AI build-out, despite her different mathematical conclusions. The narrative that U.S. growth was dependent on AI spending emerged early last year when the economy looked wobbly and growth was distorted by businesses racing to import products before new tariffs kicked in, she said.
That probably made AI look more important than it really was to economic growth in early 2025, and it was tough to shake the narrative once it took hold.
“It’s not like AI is propping up the economy,” Rubinton said.
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