WASHINGTON, Sept. 3 — Artificial intelligence-related investment by US technology giants has reached an annualized $1.5 trillion, a 50% jump from $1 trillion two years earlier, and the spending boom now supports roughly one-third of US economic growth, according to an analysis in The Wall Street Journal published August 5. The bottom line: capital flooding into software, semiconductors, and data centers is driving the expansion, while the wealth effect from rising technology stocks is boosting household consumption.
Michael Pearce, an economist at Oxford Economics, calculated that AI investment alone has recently generated nearly one-quarter of US gross domestic product growth; when the increase in household wealth from rising stock prices is included, the AI boom has supported one-third of US growth. By the numbers, the scale of the buildout is striking.
US Department of Commerce data show annualized data center construction spending reached $68.3 billion in June, up $21.5 billion from a year earlier. Over the same period, private construction spending across all other categories—housing, commercial facilities, and hospitals—fell by $101.6 billion.
The Federal Reserve Bank of St. Louis estimated that investment in information-processing equipment, software, research and development, and data centers contributed 0.97 percentage points to the 2.51% increase in real US GDP during the first three quarters of 2025—39% of total growth, 11 percentage points above the 28% contribution from information-technology investment in 2000, when the dot-com boom peaked. The concentration of capital expenditure has persisted this year.
According to the US Bureau of Economic Analysis, annualized real GDP growth stood at 1.5% in the second quarter, supported by continued consumption growth and corporate investment in information-processing equipment and software. A robust stock market has also increased household net worth and stimulated consumption. Federal Reserve data show US household net worth reached $174 trillion in the first quarter, up $13 trillion from a year earlier; the subsequent 15% rise in the Standard & Poor’s 1500 Index further expanded household wealth and spending capacity.
Investors will note that the spending shows no sign of slowing. According to market-research firm FactSet, combined capital expenditure by the five leading hyperscalers—Alphabet, Amazon, Meta, Microsoft, and Oracle—is projected to reach $4 trillion over the four years through 2029, more than $300 billion higher than market forecasts issued just one month earlier. Jonathan Millar, an economist at Barclays, said the US economy would have struggled to maintain its current momentum without the impetus from AI.
The figure that matters, though, is on the demand side: frontier-model operators are immediately absorbing newly added data center capacity. Microsoft added 31 data centers across five continents from April through June, bringing its total to an unspecified figure.
The risks are mounting alongside the buildout. If monetization fails to keep pace with investment, the AI boom could become a trigger for a sharp stock-market decline and a concurrent contraction in capital expenditure, risking a simultaneous correction in both financial markets and the real economy. Warnings over financial vulnerabilities within the AI ecosystem are intensifying in parts of the market, yet conditions in the data center sector are sending a different signal from the bubble debate—at least for now.
