The U.S. economy’s growth in the first half of 2025 has been powered almost entirely by technology-related investments, particularly in artificial intelligence and data center infrastructure. According to Harvard economist Jason Furman, these investments were responsible for nearly all the nation’s GDP expansion during the first six months of the year.
In an analysis posted on X.com on September 27, Furman estimated that without the surge in spending on data centers and information-processing technology, U.S. GDP would have grown by just 0.1% on an annualized basis—a figure that amounts to near stagnation. His findings highlight how critical technology infrastructure has become to the country’s broader economic performance.
AI Spending Outpaces Consumer Activity
Economists and market analysts have taken note of Furman’s findings, which align with growing evidence that artificial intelligence infrastructure is reshaping the U.S. economy. In August, Renaissance Macro Research reported that AI-driven data center construction contributed more to GDP growth in 2025 than consumer spending—a first in U.S. history. Considering that consumer spending typically makes up about two-thirds of national economic output, this shift underscores the growing dominance of the technology sector.
Even though investment in software and information-processing equipment represented just 4% of total GDP in early 2025, Furman calculated that these areas accounted for an astonishing 92% of GDP growth. He suggested that the economy would have grown somewhat even without the AI boom, but likely at only half the current rate.
Tech Giants Drive Unprecedented Expansion
The boom has been fueled by massive capital expenditures from leading technology companies such as Microsoft, Google, Amazon, Meta, and Nvidia. These firms have collectively invested tens of billions of dollars in expanding and modernizing their data centers to support the soaring demand for AI applications and large language models that require immense computing power.
Lisa Shallet, Chief Investment Officer at Morgan Stanley Wealth Management, noted on September 29 that this level of spending among so-called “hyperscalers” has reached extraordinary heights. She pointed out that capital expenditures on data centers and related infrastructure have increased fourfold in recent years and now approach $400 billion annually. The top 10 companies alone account for roughly one-third of that total.
According to Shallet, such spending is adding roughly one percentage point (100 basis points) to U.S. real GDP growth—a significant contribution from a single industry segment.
Growth Masks Broader Weakness
While headline economic figures appear strong, underlying trends tell a more complicated story. Job creation has slowed in recent months, and several major sectors—including manufacturing, real estate, retail, and services—have shown minimal or negative contributions to growth. Without technology investment, analysts warn that the U.S. economy might have been close to contraction.
Torsten Sløk, Chief Economist at Apollo Global Management, recently remarked that economists have consistently underestimated the economy’s resilience throughout 2025. Despite widespread predictions of a slowdown, GDP numbers remain solid—thanks primarily to the outsized role of the technology sector.
A Fragile Foundation?
The growing dependence on AI and data center spending has sparked debate over whether this trend represents sustainable innovation or a risky concentration of economic activity. Commentators have even joked that the U.S. economy now resembles “three AI data centers in a trench coat,” reflecting concerns that growth may be masking broader fragility.
Still, some economists suggest that this transformation might be part of a necessary transition toward a more digitized and energy-intensive economy. Investments in computing infrastructure, they argue, could yield long-term productivity gains—though the benefits may take years to materialize.
The Broader Economic Puzzle
Adding to the debate, Michael Gapen, Chief Economist at Morgan Stanley, observed that the gap between strong spending data and weak hiring could be explained by corporate behavior rather than technology alone. He suggested that many firms have been absorbing higher costs from tariffs and other pressures by cutting labor costs and reducing profit margins instead of passing price increases to consumers.
This dynamic, combined with record-breaking AI infrastructure spending, helps explain why the U.S. economy appears statistically strong while many households and workers continue to feel stagnant.
