Meta’s 5-gigawatt “Hyperion” data center under construction in Richland Parish, Louisiana, January 9, 2026.
Meta
Recent analysis suggests that the popular narrative that artificial intelligence is the engine that will keep the U.S. economy afloat is overstated.
The AI boom has reshaped market valuations, spurred record bond issuance to finance large-scale investments and data centers, and had a significant impact on gross domestic product (GDP), especially in early 2025. For this reason, many economists and market participants suggested that investment in AI would be a savior for the country’s stagnant economy.
But a January report by Prajakta Bhide, U.S. economic strategist at MRB Partners, found that consumption was the most important driver of U.S. GDP growth last year, as is usually the case during economic expansions. He said AI-related capital investment was the second biggest factor.
“AI is an important part of the growth story, but it’s not the only part of the growth story. The conventional wisdom is that without AI capital investment, GDP would have been lower last year. And that’s simply not true,” Beede said in an interview with CNBC. “Still, it is U.S. consumers who are driving the expansion.”
Bidet found that AI-related factors appear to have boosted real GDP growth by about 90 basis points (0.9%) on average from the first quarter to the third quarter of 2025, without making any adjustments to imports. This corresponds to just under 40% of the average real GDP growth rate over this period. Adjusting for real imports of computers, peripherals and components, semiconductors and related equipment, communications equipment, or AI-related equipment, the net average contribution of AI-related investment is smaller, at 40 to 50 basis points, or about 20 to 25 percent of real GDP growth excluding these imports from Q1 to Q3.
GDP consists of four components: consumption, investment, government spending, and net exports. Since domestic production is measured, imports are not counted. The GDP value of AI is smaller than imagined, given that much high-tech equipment is imported, Bede said.
And while data centers are getting a lot of attention, we found that AI’s most important contribution to GDP growth in 2025 will be investments in software and computers.
“While a negative shock to optimism around AI represents a risk to GDP growth, the more realistic (and smaller) estimate of AI’s growth impact after adjusting for imports dispels the common notion that the U.S. economy would be weaker without it,” Beede said in a Jan. 8 report. “Without the AI boom, GDP growth would certainly have been lower last year, but with imports also falling, solid consumer spending would have kept overall real growth at a decent level, above 1.5%.”
Bespoke Investment Group similarly dispelled the notion of AI’s contribution to GDP in a post on X in December, publishing a chart titled “Unique Q1 Created a Wildly Exaggerated Perception of AI’s Share of the Economy.”
The company found that in the second and third quarters of 2025, categories related to AI spending accounted for only 15% of quarterly GDP growth and less than 5% of total GDP.
Given the upcoming annual revisions, the official final numbers for 2025 US GDP growth are not yet in, and the quarterly results paint a mixed picture for a year dominated by headwinds such as strong AI investment, consumer demand, and volatile US tariff policy.
Real GDP grew at an annualized rate of 4.3% in the third quarter of 2025, much faster than expected. GDP grew at an annualized rate of 3.3% in the second quarter, also better than expected. Meanwhile, gross domestic product (GDP) shrank at an annual rate of 0.3% in the first quarter, marking the first negative growth since the first quarter of 2022.
Supporting a resilient economy in the future
Bidet’s research highlights the importance of consumer spending as a key pillar of economic expansion. Looking ahead, he expects consumption to remain resilient in 2026, despite slowing income growth and an increasing concentration of wealth among high-income Americans.
“There is certainly some fiscal support, and that will offset a little bit of the fact that aggregate income growth is probably not as strong as last year. … Our view is that the U.S. consumer remains in good shape,” Beede told CNBC.
He added: “The argument that only the wealthy are driving consumption and that somehow makes consumption vulnerable…I don’t see much evidence of that. I don’t think the hollowing out of consumption is that much of a cyclical risk.”
Bede expects economic growth this year to be supported by further AI investment, Federal Reserve interest rate cuts, and stabilizing U.S. unemployment supported by lower immigration. He continues to monitor quarterly productivity statistics and the pace of job creation.
