Here’s a paradox: The top-line US numbers look okay — GDP is up 3% quarter-on-quarter, the S&P 500 keeps notching record highs, and companies like Microsoft and Nvidia have become multi-trillion-dollar giants.
But what happens if you strip out the lucrative AI/data boom? Recent analyses find that up to 40% of recent GDP growth is colored by tech’s capex spending spree. Without these AI investments, the economy’s core looks distressingly flat, with profits and employment growth outside the “Magnificent Seven” tech firms stagnating. Non-tech business profits have barely budged, and consumer demand growth is at its slowest pace since late 2022. Meanwhile, old-economy jobs — from manufacturing to retail — are treading water or outright shrinking.
Can the AI tide lift all boats, or is it simply masking broader weaknesses? That’s the tension playing out beneath Wall Street’s glossy surface.
