Without data centers, GDP growth was 0.1% in the first half of 2025

Role of data centers in GDP growth

• Commenters note that data centers and software are estimated to account for ~92% of recent US GDP growth; without them, growth is near zero and likely negative per capita.
• Some argue this mostly reflects a temporary construction boom (servers, buildings, power infrastructure) rather than sustainable long‑run productivity.
• Others say even if it’s a bubble, the built capacity (compute, power) will remain and later benefit non‑AI uses.

AI boom vs bubble dynamics

• Many see classic bubble signs: circular deals (e.g., cloud/AI firms funding each other and channeling almost all of it into Nvidia hardware), valuation driven by “number go up,” and GDP inflated by money changing hands rather than end‑user value.
• Parallels are drawn to dot‑com, crypto, and housing: real underlying tech plus overbuilt, overleveraged financial structures that can later crash.
• A minority push back, noting “tech bubble” predictions have been wrong for 15+ years and that sustained high valuations might simply reflect where growth now comes from.

Economics of LLMs and data centers

• Supporters point to huge usage (hundreds of millions of ChatGPT users) as evidence of real demand and justify large data‑center capex, comparing it to early internet or CPU build‑outs.
• Skeptics counter that:
  • Most users are on free/cheap tiers; major providers have negative gross margins.
  • Efficiency gains haven’t translated into proportionally lower prices, and hardware depreciates fast.
  • Many consumer use cases (chat, images, “vibe coding”) may never justify trillion‑dollar investment.
• There’s broad uncertainty over whether:
  • LLMs stay too expensive to monetize, or
  • they become so cheap/edge‑runnable that hyperscale AI data centers are stranded.

Metrics, accounting, and “real” prosperity

• Several comments criticize headline GDP, inflation, and unemployment as crude and easily gamed (basket choices, labor definitions, circular transactions).
• Others defend simple metrics as necessary anchors for policy and public debate.
• Emphasis is placed on GDP per capita and on the idea that AI‑driven growth may be offsetting tariff and dollar‑related headwinds, rather than representing pure new prosperity.

Capital allocation and broader impacts

• Concern that AI hype diverts capital, talent, electricity, and political attention away from housing, infrastructure, and other sectors (“Dutch disease” analogy).
• Some argue VC is at least blowing money on risky tech instead of hoarding housing; others worry adjacent sectors, non‑AI startups, and non‑tech workers get squeezed.
• If AI returns disappoint, commenters expect a painful correction with spillovers into pensions, index funds, and the broader economy; scale and timing are seen as highly unclear.