The US economy has a new load-bearing wall, and it’s made of GPUs. John C. Williams, President of the Federal Reserve Bank of New York, said that without the massive wave of artificial intelligence investment currently flowing through the economy, overall demand and output would be significantly weaker.
How much weaker? Williams suggested that growth could have been reduced to roughly one-third of its actual pace during certain periods. Strip out the data centers, the AI infrastructure buildouts, and the capital expenditures from Big Tech, and the American economy starts looking a lot less impressive.
Hundreds of billions keeping the lights on
The numbers behind the AI investment boom are staggering. Williams pointed to estimates placing AI-related capital expenditures in the hundreds of billions of dollars annually. That spending is coming primarily from major technology companies racing to build out the data center capacity and infrastructure needed to train and deploy increasingly powerful AI models.
The Fed’s AI dilemma
