Posted on 10/12/2025 8:27:12 PM PDT by SeekAndFind
U.S. GDP growth in the first half of 2025 was almost entirely driven by investment in data centers and information processing technology, according to Harvard economist Jason Furman.
Excluding these technology-related categories, Furman calculated in a Sept. 27 post on X.com GDP growth would have been just 0.1% on an annualized basis, a near standstill that underlines the increasingly pivotal role of high-tech infrastructure in shaping macroeconomic outcomes.
Furman’s findings, shared online and echoed by financial analysts including Robert Armstrong of the Financial Times‘ Unhedged (the same writer who coined the term “TACO trade’), echo several months of observations on the remarkable surge in data-center infrastructure. In August, Renaissance Macro Research estimated, to date in 2025, the dollar value contributed to GDP growth by AI data-center buildout had surpassed U.S. consumer spending for the first time ever. That’s remarkable considering consumer spending is two-thirds of GDP.
Technically, as Furman notes, investment in information-processing equipment and software was only 4% of U.S. GDP for the first half of 2025, yet it also accounted for fully 92% of GDP growth over that period. Furman added it’s probably not the case the U.S. economy would have recorded almost no expansion at all absent this buildout, reasoning that “absent the AI boom we would probably have lower interest rates [and] electricity prices, thus some additional growth in other sectors. In very rough terms that could maybe make up about half of what we got from the AI boom.” But still, it’s big.
Tech giants such as Microsoft, Google, Amazon, Meta, and Nvidia have poured tens of billions of dollars into building and upgrading data centers, responding to explosive demand for artificial intelligence and large language models that require massive computing resources.
(Excerpt) Read more at fortune.com ...
But there ARE data centers. If the money didn’t go into data centers, it would go into something else.
Harvard and Armstrong. Lol.
Instagram, YouTube, and chatbots are fueling the economy.
Macrohard
Fortune magazine? An anti-Trump harvard professor? What is there not to trust? /s
Now do federal spending under Biden and tell us the “real” GDP without it….. these folks are scum.
This story is ridiculous.
When you think about how many government jobs Trump eliminated, and the decrease in Federal spending that he already accomplished, any economic growth is miraculous. Biden’s entire economy was printing money and government money, it was a fast train to national collapse.
Stop pointing out facts, you fascist!
You just know some kind of link to climate catastrophe is coming. They can't help themselves.
Well, if a Harvard “expert” says so, it must be true - riiiight?
THE DATA CENTERS ARE A VERY EXPENSIVE ROAD:
THEY USE MASSIVE AMOUNTS OF WATER-—IT IS NOT RECYCLED
THEY REQUIRE EVEN MORE MASSIVE AMOUNTS OF POWER
I understand that the data centers I spend time in, Iron Mountain, Phoenix, AZ reuses the cooling water. Data Centers predate modern AI. The energy they use displaces the energy that would have been used in on site processing, with the only extra ovehead being the switches. But even decentralized setups use switches if the company operates internationally.
Okay; if the data centers can be discounted as part of the driving force for the economy, so can the automobile industry.
Take the auto industry out, and the economy would shrink.
Heck, take out the housing market, and we’d be depression territory.
A lot of what’s driven economic growth for the last 50+ years has been the technology sector, with IT/Computers being a major part of that sector. without them, we wouldn’t even have advanced to what the world is today.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.