Author: IBL News

IBL News | New York

Data centers the size of theme parks are sprouting around the country, and developers and chipmakers are raking in hundreds of billions of dollars in investments.

The US economy in 2025 is split into two: Everything tied to artificial intelligence is booming. Just about everything else is not, an analysis in The New York Times says.

Investments in computer equipment and software accounted for more than 90 percent of growth in gross domestic product in the first half of the year, with the AI gold rush explaining the economy’s surprising resilience this year.

U.S. companies spent more than $60 billion on computer equipment in the second quarter, up 45 percent from a year earlier. They spent another $10 billion on data center construction, up 35% from the previous year. Artificial intelligence probably accounts for most of that growth, economists and industry experts say.

“Unemployment has risen, hiring has slowed, and industries including manufacturing and home building are cutting jobs. Consumer sentiment has slumped amid high prices. The public sector has been weighed down by budget cuts and federal layoffs. Tariffs, and the uncertainty surrounding them, have been a drag on international trade and led to slower investment by many companies.”

In the stock market, seven companies, including Amazon, Microsoft, and Alphabet, the parent company of Google, now account for well over a third of the S&P 500 index’s value. Just one of the so-called Magnificent Seven, Nvidia, which makes the chips that power many of the most advanced large language models, recently, though briefly, topped $5 trillion in market value.

Such valuations are predicated on assumptions that recent rapid growth will continue for years.