Economy

mahatmakanejeeves

(68,998 posts) Mon Feb 23, 2026, 07:11 AM Yesterday

This economic idea transfixed Wall Street and Washington. It may be a mirage.

This economic idea transfixed Wall Street and Washington. It may be a mirage.

Massive investment in AI contributed “basically zero” to U.S. economic growth last year, Goldman Sachs has calculated.

February 23, 2026 at 5:00 a.m. EST Today at 5:00 a.m. EST
7 min

By Shira Ovide

A new economic indicator has captivated Silicon Valley, Wall Street and Washington.

Technology companies’ massive spending on artificial intelligence accounted for half or more of U.S. growth last year, some economists calculated, effectively propping up an otherwise anemic economy.

35 Comments

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4 replies

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This economic idea transfixed Wall Street and Washington. It may be a mirage. (Original Post) mahatmakanejeeves Yesterday OP

Of course it did. LakeVermilion Yesterday #1

Link ... and what I'm getting from the full article progree Yesterday #2

Which would make growth without AI about 1.4% bucolic_frolic 1 hr ago #3

TO look at it another way bucolic_frolic 55 min ago #4

LakeVermilion

(1,547 posts)

1. Of course it did.

Reply to mahatmakanejeeves (Original post)

Mon Feb 23, 2026, 07:20 AM

Yesterday

Our economy is stuck in neutral. Not addressing immigration in a meaningful way is going to bring a lot of pain to our economy. Deportation is a gimmick with no thought about the consequences.

progree

(12,860 posts)

2. Link ... and what I'm getting from the full article

Reply to mahatmakanejeeves (Original post)

Mon Feb 23, 2026, 11:46 AM

Yesterday

https://archive.ph/IgY4W

What's spent on AI in the U.S., like for building data centers, minus the imported part of that (a lot of the chips are Asian-made), is counted as GDP in the official GDP calculation, whether or not it produces any economic benefit,

What's being spent on AI is debatable within a wide range, so it's part of the disagreement about its contribution to the GDP number.

Technology companies’ massive spending on artificial intelligence accounted for half or more of U.S. growth last year, some economists calculated, effectively propping up an otherwise anemic economy.

. . . “This is a big deal, but not the be-all and end-all,” said Joseph Politano, an economic analyst who writes the Apricitas Economics newsletter. He calculates that AI-related spending contributed about 0.2 percentage points to the 2.2 percent U.S. economic growth last year. . . . AI “is a special case, because so much is imported,” he said. . . . Five leading U.S. technology companies are expected to spend a combined $700 billion this year on AI infrastructure and other major projects

. . . Rubinton at the St. Louis Fed co-wrote an analysis that concluded AI-related business spending contributed about 39 percent of U.S. economic growth through the first nine months of 2025.

She stands by that calculation but acknowledges that it is probably the maximum possible economic boost related to AI. The tally included spending on software, computers and research that wasn’t necessarily all related to AI. On Friday, after the release of a government estimate of economic growth for all of 2025 ((2.2% -progree)), Rubinton said her analysis broadly stood.

bucolic_frolic

(54,737 posts)

3. Which would make growth without AI about 1.4%

Reply to progree (Reply #2)

Tue Feb 24, 2026, 01:58 PM

1 hr ago

I doubt it's that high. AI has frozen companies. Productivity must be plunging, but they can't fire because they don't know what they'll get if they soon need to rehire, and they don't hire because applicants lack AI experience.

Meanwhile tariffs have clipped consumer spending hard stop.

Meanwhile Wall Street theories on AI abound. Growth forever to money sink. Who will win? Does anyone win if it never makes money? Large Cap tech is betting hundreds of billions - essentially the whole company, no matter how large, can have a date with bankruptcy if AI doesn't pay off on time. A parallel is Ford and Honda with EV's. Said to eat $50 billion each to wind it down now that it's not selling. The infrastructure was never there to fuel the wheels on the road.

Too much innovation too fast in too many areas. Consumers can't afford it. Tech, tech, tech, credit, credit, credit. Mortgage. Car payments.

bucolic_frolic

(54,737 posts)

4. TO look at it another way

Reply to bucolic_frolic (Reply #3)

Tue Feb 24, 2026, 02:05 PM

55 min ago

Trillions spent on AI. If even 2 or 3 AIs are so smart as to have complete and total knowledge about everything, and everyone or more importantly every company can have the knowledge for a fee for their workers to use .... why do they need workers or so many workers, or what competitive advantage is there is accessing AI? No falling behind competitors? What I'm thinking is there's no competitive advantage in AI, no moat as the phrase is known. If everyone else can replicate your work for the price of AI access ... there is no profitable business. The knowledge is open source. Profits compress over time towards zero.

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