America is now one big bet on AI

DESPITE mounting threats to the US economy – from high tariffs to collapsing immigration, eroding institutions, rising debt and sticky inflation – large companies and investors seem unfazed. They are increasingly confident that artificial intelligence (AI) is such a big force, it can counter all the challenges.

Lately, this optimism has become a self-fulfilling prophecy. The hundreds of billions of dollars that companies are investing in AI now account for an astonishing 40 per cent share of US gross domestic product growth this year. And some analysts believe that estimate doesn’t fully capture the AI spend; so the real share could be even higher.

AI companies have accounted for 80 per cent of the gains in US stocks so far in 2025. That is helping to fund and drive US growth, as the AI-driven stock market draws in money from all over the world, and feeds a boom in consumer spending by the rich.