Consumer Spending, Not AI Boom, Powered U.S. Economic Growth in 2025 Despite Hype
By Staff Reporter
Washington, D.C. – A fresh economic analysis has shattered the widespread belief that massive AI investments were the primary force behind the United States’ robust GDP expansion in 2025. Instead, everyday consumer spending emerged as the true powerhouse, contributing far more to domestic growth than the tech sector’s headline-grabbing expenditures on data centers and chips.
Research from MRB Partners, a leading economic strategy firm, reveals that AI-related capital spending accounted for just 20-25% of real U.S. GDP growth throughout the year, once adjustments are made for imported hardware. This finding directly contradicts the dominant narrative peddled by Wall Street analysts and financial media, which portrayed AI as the economy’s sole savior amid fears of stagnation.[1]
The Numbers Behind the Myth
At first glance, AI investments appeared impressive. Unadjusted data showed AI components adding approximately 90 basis points to real GDP growth from the first quarter through the third quarter of 2025 – equivalent to about 40% of the period’s average growth. Tech giants like Nvidia, Microsoft, and Amazon poured hundreds of billions into infrastructure, fueling a hype cycle that suggested the U.S. economy was riding solely on artificial intelligence’s coattails.[1]
However, GDP calculations measure domestic production, not total spending. A critical portion of AI hardware – including semiconductors, computers, peripherals, and telecom equipment – is manufactured overseas, primarily in Asia. When MRB Partners’ U.S. economic strategist Prajakta Bhide factored in these real imports, the net domestic contribution from AI plummeted to 40-50 basis points, or roughly 20-25% of overall GDP growth.[1]
“AI is an important part of the growth story, but it’s not the only part of the growth story,” Bhide told CNBC. “Still, it’s the U.S. consumer that continues to drive the expansion.”[1]
This adjustment highlights a key economic reality: much of the AI spending boom leaked abroad to foreign suppliers, rather than circulating within the U.S. economy. Consumer spending, by contrast, remained resilient, powered by wage gains, low unemployment, and steady household confidence, filling the gap and propelling growth across sectors like retail, services, and housing.[1]
Challenging Wall Street Orthodoxy
The MRB Partners report arrives at a pivotal moment, as 2025 closes with the U.S. economy defying recession predictions. Throughout the year, investor calls and media headlines fixated on AI capex as the “only thing preventing economic stagnation.” Tech stock surges, driven by AI optimism, masked broader dynamics, leading to overestimations of the sector’s macroeconomic impact.[1]
Global AI spending did surge, projected to exceed $330 billion in 2025 and climb to over $500 billion by the end of 2026, underscoring the technology’s momentum. Yet, for the U.S. specifically, these figures do not translate one-to-one into domestic GDP gains due to import dependencies.[2]
Economists note that this imbalance could have policy implications. Policymakers pushing for AI leadership may need to prioritize domestic manufacturing incentives to capture more value at home. “The narrative that AI investment saved the U.S. economy from collapse just got upended,” one analysis quipped, emphasizing the economy’s more balanced foundation.[1]
Broader Economic Context
U.S. GDP growth in 2025 averaged strong quarterly gains, with the Bureau of Economic Analysis reporting expansions fueled by personal consumption expenditures (PCE), which make up about 70% of the economy. Non-AI sectors, including manufacturing resurgence and energy production, also played supporting roles, but consumers stole the show.[1]
| Factor | Unadjusted AI Contribution | Adjusted for Imports | Consumer Spending Role |
|---|---|---|---|
| GDP Growth Impact (Q1-Q3 2025) | ~90 basis points (40%) | 40-50 basis points (20-25%) | Primary driver |
| Key Insight | Includes foreign imports | Net domestic production | Resilient household demand |
The report’s release in early 2026 prompts reflection on 2025’s growth story. While AI undeniably boosted productivity in select industries and promised long-term gains, it was not the “biggest engine” as popularly assumed. This revelation tempers expectations for 2026, where global AI spending growth continues but domestic benefits hinge on reducing import reliance.[1][2]
Implications for Investors and Policy
For investors, the findings suggest diversification beyond Big Tech. Portfolios overly concentrated in AI plays may overlook consumer-facing stocks, which demonstrated superior resilience. Wall Street’s AI obsession, while profitable for some, painted an incomplete picture of economic health.[1]
From a policy standpoint, the Trump administration – entering its early days – faces pressure to bolster U.S. chip production through subsidies and tariffs, echoing the CHIPS Act’s goals. Enhancing domestic supply chains could amplify AI’s GDP multiplier effect in coming years.[1]
As Bhide concluded, the U.S. expansion is “more balanced than headlines suggest.” With consumer strength anchoring growth, the economy enters 2026 on firmer footing, less dependent on any single sector’s fortunes.[1]
This analysis underscores a timeless economic lesson: in America’s consumer-driven powerhouse, household wallets often outpace even the most revolutionary technologies.
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