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Without data centers, GDP growth was 0.1% in the first half of 2025
- kermatt 1y agoIF this data center growth is largely rooted in AI _speculation_, and that gamble does not pay off, what sort of market crash or bubble pop occurs?
- pavlov 1y agoAI bubble masking the self-inflicted tariff recession.
- deleted 1y ago[deleted]
- Animats 1y agoUS annual population growth is about 0.5%. So per capita GDP not counting data centers went down.
- mytailorisrich 1y agoThat's what has been happening in the UK for several years. GDP per capita is more important than overall GDP to see the trend in prosperity, IMHO.
- stinkbeetle 1y agoYes, and GDP per capita with them went up. And removing a source of GDP that has been shrinking might make GDP growth look even higher. What does it tell us? Anything?
- Tarsul 1y agoI think this year the population actually goes down. So per capita GDP growth is even bigger than 0,1%!
- epistasis 1y agoSee also this Bloomberg article on how circular the deals are: https://www.bloomberg.com/news/features/2025-10-07/openai-s-nvidia-amd-deals-boost-1-trillion-ai-boom-with-circular-deals?srnd=phx-ai https://www.bloomberg.com/news/features/2025-10-07/openai-s-... This is another way that bubbles form, a cabal of cross-dealing giants that don't have solid revenue to ground the valuations is a very scary position. I believe that a lot of AI is real, but the realness of AI's impact on the economy does not prevent a bubble. The dot com bubble didn't make the internet any less real or impactful on everyone's lives. So it feels like very scary times ahead. Also, the devaluation of the dollar is an extremely tricky situation for the US. Morgan Stanley puts it at 10% less value in 2025, and another 10% drop by the end of 2026: https://www.morganstanley.com/insights/articles/us-dollar-declines https://www.morganstanley.com/insights/articles/us-dollar-de... I was never scared with the inflation during Biden because it seemed like we would be on track to put the economy in the right position, because it was global and the US was doing so much better than the rest of the world. But now, it feels like the US is intentionally entering recession and choosing a future of poverty.
- mgh2 1y agohttps://news.ycombinator.com/item?id=45509898 https://news.ycombinator.com/item?id=45509898
- hiimkeks 1y agoCory also has a giant writeup about the whole situation, including more links. https://pluralistic.net/2025/09/27/econopocalypse/ https://pluralistic.net/2025/09/27/econopocalypse/
- ciconia 1y agoVery cheap cloud hosting coming soon to a data center near you...
- rixed 1y ago> the devaluation of the dollar is an extremely tricky situation for the US For many, the revaluation of the dollar is actually the scary scenario. See for instance this (maybe too) subtle analysis from Yanis Varoufakis: https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterplan/ https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterpl...
- zundunka 1y agoThey estimate data centers/software are responsible for 92% of GDP growth? If that's true, then we are up to some bad news soon.
- kubb 1y agoIsn’t it funny that there are like 3 numbers that matter to people when evaluating economic conditions? Inflation, unemployment, GDP. It’s like we’re incapable of nuance on a societal level.
- lmm 1y agoMore like we know that people can always find an obscure enough number to support what they want to do. There's a lot of value in having simple metrics that are hard to game.
- kubb 1y agoInflation is easily gamed by manipulating the basket of goods used to determine it. Unemployment can be manipulated by only including people who „actively search” for the job, and tweaking the definition of „actively”, counting part timers. GDP is gamed by circular money movements.
- lmm 1y agoWell sure, but the more complex your measurements are the worse you make it. Rather than looking for more nuance, we should look for stricter approaches to avoid those issues.
- carlmr 1y agoA lot of our economy relies on "number goes up" to tell people to invest The metric doesn't matter as long as it goes up most of the time.
- re-thc 1y ago> Inflation is easily gamed by manipulating the basket of goods used to determine it. Just turn the tariffs on and off again.
- scrollop 1y agoMatter to whom? If you're an economist or analyst, I have a feeling it's a little more nuanced than you're stating. If you mean "for the average person" or "what the media reports for the average person", then, "duh". The normal distribution of IQ in the general population would cause a general media company to limit it's complexity of data reported.
- deleted 1y ago[deleted]
- justlikereddit 1y agoBehold the miracle! AI is already saving the economy and we don't even have AGI yet :^)
- mg 1y agoSo $400B per year is currently spent on datacenter buildout? To see if that is too much or not, we have to put that number in relation to the value those datacenters will create in the future. If global GDP is $100T and labor is 50% of that, then the current TAM for intelligence is around $50T. How much of that has to be automated per year to justify $400B of investment? For a 10% ROI it would be around 1%, right? But the datacenters will not be the only cost of generating artificial work. We also need energy, software and robots. So let's say 2%. So it comes down to the question whether those datacenters built for $400B will automate 2% of global GDP in the foreseeable future. And there is another option: That the TAM increases. That we use the new possibilities we have to build more products and services. And see global GDP grow. 2% AI driven global GDP growth would also justify the $400B datacenter buildout. So let's think about a mix: 1% labor automation and 1% GDP growth per year via AI. That would be needed to justify continued spending of $400B per year for the AI buildout.
- simianwords 1y agoI don’t know why everyone’s confident that the investments won’t pay off. Every such post in HN is such a way. 800 million weekly active users from ChatGPT implies that people actually like LLM’s and likely the growth will still keep increasing. Every signal points to this - so investment in data centers make sense?
- catmanjan 1y agoImagine how many millions would drive a Ferrari if they gave them away for free
- simianwords 1y agoIt’s not true that people are only using it because it’s free. It’s actually quite interesting to see these contradictory positions play out: 1. LLMs are useless and everyone is making a stupid bet on it. The users of llms are fooled into using it and the companies are fooled into betting on it 2. Llms are getting so cheap that the investments into data centers won’t pay off because apparently they will get good enough to run on your phone 3. Llms are bad and they are bad for environment, bad for the brain, bad because they displace workers and bad because they make rich people richer 4. AI is only kept up because there’s a conspiracy to keep it propped up by Nvidia, oracle, OpenAI (something something circular economy) 5. AI is so powerful that it should not be built or humanity would go extinct
- catmanjan 1y agoIt is true that none of the LLM providers are profitable though, so there is some number above free that they need to charge and I am not convinced that number is compelling
- simianwords 1y agoNone of LLM providers being profitable is exactly the situation I would expect. Them being profitable is so absurd on the contrary! Why wouldn't they put the money back into R&D and marketing?
- floppiplopp 1y agoOh well, I guess we have another once-in-a-lifetime economic crisis ahead of us. Ready your tax dollars, prepare the bailouts! We've got some billionaires to save.
- netfortius 1y agoSource: Harvard - an institution this administration doesn't like, so data will probably be categorized as fake news.
- stkdump 1y agoI am surprised that Taiwan and China are not mentioned in the article or in these comments. Given the threat that China will get to Taiwan and capture control over the unrivaled TSMC, investing into silicon while we can is pure and simple de-risking in a de-globalizing world.
- lifeisstillgood 1y agoIt’s worth noting that pretty much all the growth in AI / Data centres is an accounting trick as well. Nvidia just announced it’s investing X billion dollars into OpenAI who will turn around and spend 98% of that on Nvidia chips, so GDP rises, stocks rise but actual free market activity? Not so much
- whazor 1y agoBuilding physical data centres and GPUs will cost some real money.
- usrnm 1y agoGPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US
- re-thc 1y ago> GPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US Does that matter? So many things these days aren't physically made in the US. So US companies don't get the profits and aren't needed? The actual "made in" part is a small fraction of the total earnings. See how much an iPhone costs to make vs how much it gets sold for.
- usrnm 1y agoAnd now look at how making iPhones in China helped to grow the whole Chinese electronics industry, as opposed to inflating some virtual numbers for the US
- Propelloni 1y agoAnd now look how the "virtual numbers" allow the USA to drag the rest of the world through the mud on a nosering. The USA was the winner in all this, but apparently the people don't feel it. What might have gone wrong? (hint: wealth distribution, not manufacturing)
- teiferer 1y ago> absent the AI boom we would probably have lower interest rates [and] electricity prices, thus some additional growth in other sectors. In other words, the AI hype comes at the cost of lower growth rates in other sectors of the economy? It makes sense, since investor money is spent exactly once. If it goes to AI then it doesn't go elsewhere. And if it didn't go to AI then it would go elsewhere. Sad for folks outside tech. But at least they can AI generate cat pictures now, and watch their tech friend use AI tooling to write software.
- pj_mukh 1y agoI see this take a lot, but it confuses me. There is no guarantee that LP’s would take that money and instead invest it in <tech I respect that is not AI>. They would just as likely hoover up housing around the country or some such insanity to capitalize on the scarcity. VC is actually a pretty effective vehicle to separate rich people from their money so society can try crazy things. You just don’t agree with this particular adventure and frankly there will never be the perfect alternative adventure.
- mordae 1y agoMost people wouldn't vote or participate in this investment craze. Maybe we shouldn't let unelected lucky nobodies decide how we invest our time for us.
- pj_mukh 1y agoI’m not saying don’t tax them or let them influence politics. I’m saying letting them go to space or turning sand into intelligence is infinitely better than buying land and charging us rent (what most rich people have done in history).
- alanbernstein 1y agoThey are hoping to invest in the companies that will be the (next) electronic equivalent of rent-seeking land owners, as faang are now. It's better since land is physically necessary to live, but only marginally so.
- skywal_l 1y agoZuckerberg and al are expecting a bust so they can consolidate for cheap. We've seen this before again and again. Nothing new here.
- ottomanbob 1y agoWow, deflation is becoming so obvious that even the geniuses at Harvard are noticing.
- aussieguy1234 1y agoso much for the AI productivity boost...
- jeisc 1y agoUnder Nazi rule, Germany had full employment because not having a job was a ticket to a concentration work camp
- freetonik 1y agoReminds me of many discussions in Ireland like "if we didn't have big tech giants, we'd have a government budget deficit". Sure, but we do have big tech giants. If I didn't have a job, I'd be poor.
- defrost 1y agoThe very real concern here is that the AI bubble inflating the economic tent and providing all those jobs for vibers has all the nutritional value of that famous potato crop in Ireland just before the blight struck.
- throawayonthe 1y ago(U.S. GDP)
- throw-10-8 1y agoNot a surprise to anyone trying to fundraise outside the AI space. AI sucked the air out of the room for almost no return, the crash is going to be something to behold.
- grafmax 1y agoApparently we address the climate crisis by investing entirely in new energy consumption.
- deleted 1y ago[deleted]
- creer 1y agoIsn't this normal? That if you stripped whatever is currently hot from the economy, the rest would be... lackluster? For one, any "special effort" investment money is pouring in there instead of somewhere else, or many somewhere elses?