For the better part of a year, the U.S. economy has been a puzzle. Forecasters have consistently called for a slowdown that has stubbornly refused to arrive. Despite sluggish hiring and weakness in key sectors, the headline Gross Domestic Product (GDP) numbers continue to look surprisingly strong. But what if that strength is an illusion, a statistical ghost powered by a single, hyper-caffeinated industry?

A closer look at the numbers reveals a startling dependency. According to an analysis from a Harvard economist, if you strip out the massive investment in information processing equipment — primarily the buildout of artificial intelligence data centers — U.S. GDP growth for the first half of 2025 would have been a paltry 0.1%. That’s not a slowdown; it’s a dead stop.

Building an Economy on Silicon and Steel

The scale of this investment is difficult to overstate. The largest tech companies, the so-called “hyperscalers,” are pouring capital into data infrastructure at an unprecedented rate. One chief investment officer at Morgan Stanley Wealth Management noted that annual spending is approaching $400 billion, a fourfold increase in recent years. This spending spree is estimated to be adding a full percentage point to real GDP growth all on its own.

To put this in perspective, consider this: for the first time ever, the contribution to GDP growth from this tech buildout has reportedly surpassed the contribution from all U.S. consumer spending combined. That’s a tectonic shift, given that consumers typically account for two-thirds of the entire economy.

This has led commentator Rusty Foster to quip that our economy might just be “three AI data centers in a trench coat” — a clever disguise that masks the underlying weakness of everything else. While sectors like manufacturing, retail, and real estate are treading water, Big Tech is single-handedly keeping the economy’s head above it.
An Industrial Bubble?
Naturally, this kind of concentrated, explosive growth raises the inevitable question: is this a bubble? The answer is complex. One prominent tech founder, the visionary behind a major e-commerce and cloud computing giant, has suggested that if it is a bubble, it’s an “industrial bubble” rather than a purely financial one. The argument is that unlike the speculative manias of the past, this boom is creating tangible, valuable infrastructure. We are building something real, and someday we will be glad to have such immense computing power at our disposal.

Still, the concentration risk is undeniable. While alternative theories exist for the economy’s surprising performance — such as corporations absorbing costs to keep prices down — they don’t fully account for the sheer gravitational pull of the data center boom. The critical question isn’t whether this new infrastructure will be useful, but whether this level of investment is sustainable. When the building frenzy inevitably cools, will the rest of the economy be ready to step up and pull its own weight, or will the trench coat finally fall open?