AI boom is US’ economic counterweight

AS US President Donald Trump’s second term unfolds, the American economy presents a paradoxical picture. While traditional economic indicators flash warning signals – rising inflation, weakening employment and growing consumer anxiety – the nation’s gross domestic product continues to show respectable growth.

The explanation lies in an unprecedented surge of artificial intelligence (AI) investment that has emerged as the single most important force propping up economic expansion.

The scale of AI’s economic impact

Global AI spending is projected to reach US$375 billion in 2025 and US$500 billion by 2026, fuelling GDP growth and market optimism. This investment boom has become so dominant that in the first half of 2025, AI-related capital expenditures contributed 1.1 per cent to GDP growth, outpacing the US consumer as an engine of expansion.