  Over the last six months, capital expenditures on AI—counting just information processing equipment and software, by the way—added more to the growth of the US economy than all consumer spending combined. You can just pull any of those quotes out—spending on IT for AI is so big it might be making up for economic losses from the tariffs, serving as a private sector stimulus program.

Wow.

▲ gruez 7 days ago | parent | next [-]

It's not as bad as the alarmist phrasing would suggest. Consider a toy example: suppose consumer spending was $100 and grew by $1, but AI spending was $10 and grew by $1.5, then you can rightly claim that "AI added more to the grow of the US economy than all consumer spending combined"[1]. But it's not as if the economy consists mostly of AI, or that if AI spending stopped the economy will collapse. It just means AI is a major contributor to the economy's growth right now. It's not even certain that the AI bubble popping would lead to all of that growth evaporating. Much of the AI boom involves infrastructure build out for data centers. That can be reallocated to building houses if datacenters are no longer needed.

[1] Things get even spicier if consumer growth was zero. Then what would the comparison? That AI added infinitely more to growth than consumer spending? What if it was negative? All this shows how ridiculous the framing is.

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agent_turtle 7 days ago | parent [-]

[flagged]

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dang 7 days ago | parent | next [-]

Please don't cross into personal attack. We ban accounts that do that.

If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it.

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gruez 7 days ago | parent | prev [-]

>Have you heard of the Dunning-Kruger effect?

Have you heard of the disagreement hierarchy? You're somewhere between 1 and 3 right now, so I'm not even going to bother to engage with you further until you bring up more substantive points and cool it with the personal attacks.

https://paulgraham.com/disagree.html

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agent_turtle 7 days ago | parent [-]

One of the major reasons there’s such a shortage of homes in the US is the extensive permit process required. Pivoting from data centers to home construction is not a straightforward process.

Regarding the economics, the reason it’s a big deal that AI is powering growth numbers is because if the bubble pops, jobs go poof and stock prices with it as everyone tries to salvage their positions. While we still create jobs, on net we’ll be losing them. This has many secondary and tertiary effects, such as less money in the economy, less consumer confidence, less investment, fewer businesses causing fewer jobs, and so on. A resilient economy has multiple growth areas; an unstable one has one or two.

While you could certainly argue that we may already be in rough shape even without the bubble popping, it would undoubtedly get worse for the reasons I listed above,

	▲	gruez 7 days ago \| parent [-]
		>One of the major reasons there’s such a shortage of homes in the US is the extensive permit process required. Pivoting from data centers to home construction is not a straightforward process. Right, I'm not suggesting that all of the datacenter construction will seamlessly switch over to building homes, just that some of the labor/materials freed would be allocated to other sorts construction. That could be homes, amazon distribution centers, or grid connections for renewable power projects. >A resilient economy has multiple growth areas; an unstable one has one or two. >[...] it would undoubtedly get worse for the reasons I listed above, No disagreement there. My point is that if AI somehow evaporated, the hit to GDP would be less than $10 (total size of the sector in the toy example above), because the resources would be allocated to do something else, rather than sitting idle entirely. >Regarding the economics, the reason it’s a big deal that AI is powering growth numbers is because if the bubble pops, jobs go poof and stock prices with it as everyone tries to salvage their positions. While we still create jobs, on net we’ll be losing them. This has many secondary and tertiary effects, such as less money in the economy, less consumer confidence, less investment, fewer businesses causing fewer jobs, and so on. That's a fair point, although to be fair the federal government is pretty good at stimulus after the GFC and covid that any credit crunch would be short lived.

▲ raincole 7 days ago | parent | prev | next [-]

> growth

Is the keyword here. US consumers have been spending so much so of course that sector doesn't have that much room to grow.

▲ troyastorino 7 days ago | parent | prev | next [-]

I've seen this quote in a couple places and it's misleading.

Using non-seasonally adjusted St. Louis FRED data (https://fred.stlouisfed.org/series/NA000349Q), and the AI CapEx spending for Meta, Alphabet, Microsoft, and Amazon from the WSJ article (https://www.wsj.com/tech/ai/silicon-valley-ai-infrastructure...):

-------------------------------------------------

Q4 2025 consumer spending: ~$5.2 trillion

Q4 2025 AI CapEx spending: ~$75 billion

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Q1 2025 consumer spending: ~$5 trillion

Q1 2025 AI CapEx spending: ~$75 billion

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Q2 2025 consumer spending: ~$5.2 trillion

Q2 2025 AI CapEx spending: ~$100 billion

-------------------------------------------------

So, non-seasonally adjusted consumer spending is flat. In that sense, yes, anything where spend increased contributed more to GDP growth than consumer spending.

If you look at seasonally-adjusted rates, consumer spending has grown ~$400 billion, which might outstrips total AI CapEx in that time period, let alone growth. (To be fair the WSJ graph only shows the spending from Meta, Google, Microsoft, and Amazon. But it also says that Apple, Nvidia, and Tesla combined "only" spent $6.7 billion in Q2 2025 vs the $96 billion from the other four. So it's hard to believe that spend coming from elsewhere is contributing a ton.)

If you click through the the tweet that is the source for the WSJ article where the original quote comes from (https://x.com/RenMacLLC/status/1950544075989377196) it's very unclear what it's showing...it only shows percentage change, and it doesn't even show anything about consumer spending.

So, at best this quote is very misleadingly worded. It also seems possible that the original source was wrong.

▲ bravetraveler 7 days ago | parent | prev | next [-]

Tepidly socially-acceptable welfare

▲ electrondood 7 days ago | parent | prev | next [-]

For context though, consumer spending has contracted significantly.

▲ lisbbb 7 days ago | parent | prev | next [-]

That's bad because you just know at some point the bell is getting rung and then the bubble bursts. It was the same thing with office space in the late 1990s--they overbuilt like crazy predicting huge demand that never appeared and then the dot-com bubble burst and that was that.

▲ intended 7 days ago | parent | prev | next [-]

Yes, wow. When I heard that data point I was floored.

▲ 7 days ago | parent | prev [-]

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