Data Centres Drive US GDP Growth, Sparking AI Bubble Concerns

On October 10, 2025, Harvard economist Jason Furman revealed that investments in data centres and information processing technology were pivotal in driving US GDP growth in the first half of 2025. This statistic raises significant concerns about the sustainability of the current economic trajectory, given that GDP growth outside of this sector was virtually stagnant at just 0.1%.

According to a report by Fortune, without the heavy spending on data centres, the US economy would have seen minimal growth. This reliance on high-tech infrastructure underscores the critical role it plays in shaping macroeconomic outcomes, particularly as the demand for advanced technologies continues to escalate.

AI Investments Surpass Consumer Spending

The surge in AI-related investments is striking. Estimates from Renaissance Macro Research indicate that expenditure on AI data centres surpassed US consumer spending in the first half of 2025. This shift highlights the increasing focus of companies on integrating AI across various sectors, often driven by the aspiration to embed these technologies into everyday applications.

Historically, the promise of AI encompassed lofty ambitions such as addressing climate change and enhancing healthcare. Presently, however, the focus appears to have shifted towards more immediate applications, including automating tasks such as writing essays and generating multimedia content. This pivot raises questions about the overall value and intent behind such investments.

As companies strive to promote AI adoption, there is a growing suspicion that the urgency is tied to the financial stakes involved. With substantial sums being funneled into AI technologies, there are concerns over the implications if these innovations fail to gain widespread acceptance.

Warnings from Financial Institutions

Both the Bank of England and the International Monetary Fund have recently cautioned about potential risks related to what some are calling an “AI bubble.” The Bank of England noted that equity market valuations for technology companies focused on AI appear inflated, suggesting that a sharp market correction is increasingly likely.

“On a number of measures, equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence,”

the Bank of England stated, emphasizing that these companies may face significant challenges should expectations around AI’s impact diminish.

This growing skepticism about the AI sector’s trajectory is further complicated by the ethical and environmental implications of rapid technology adoption. Critics argue that the push for AI integration often overlooks critical issues, including copyright infringement and the environmental impact of constructing resource-intensive data centres.

As companies and governments prioritize energy capacity for these facilities, questions arise about the balance between technological advancement and the needs of the population. The ongoing investments in AI are juxtaposed against global efforts to achieve net zero emissions, raising concerns about whether the focus on data centres is sustainable in the long term.

As the AI narrative evolves, the potential fallout from over-promising and under-delivering on its capabilities looms large. With the stakes so high, both the tech industry and policymakers must navigate these challenges carefully to avoid a detrimental economic downturn.

The question remains: will the benefits of AI justify the growing expenditures and the societal costs associated with its rapid expansion? As we watch this landscape evolve, it is crucial to consider the broader implications of our technological ambitions.