The article “The A.I. Spending Frenzy Is Propping Up the Real Economy, Too” from The New York Times explains how huge investments in AI are not only raising tech stock prices but are also helping the U.S. economy grow. In 2025, companies worldwide are expected to spend $375 billion on AI infrastructure like data centers and computer equipment, and next year that number is set to rise to $500 billion. Investment in software and computer equipment alone (not counting data center buildings) made up about a quarter of all economic growth in the U.S. last quarter, according to Commerce Department figures. This increase in spending is leading to lots of new construction jobs for electricians, engineers, and equipment operators, even as other parts of the real estate market slow down.
Although there’s excitement and optimism, experts warn that there are risks because many AI projects aren’t yet profitable. Still, the strong growth continues to drive business activity and employment in the sector, with even more spending planned for next year. It will be interesting to see whether this increased investment will keep the economy growing, or if there will be challenges like those seen in earlier tech booms.
Do you think this kind of crazy spending is going to continue in the long run? Or do you think everyone is trying to get ahead of the game right now, in addition to the crazy hype around it all?
ReplyDeleteI love how we finally received the mention of AI leading to create more jobs, I feel as if media mostly displays that AI will create LESS jobs for people.
ReplyDeleteI think that this new era of AI and the spending on it is extremely fascinating. It is safe to assume that spending will not decrease anytime soon, it is just a matter of how the economy reacts when it continues to rise. From the podcast that we listened to earlier this semester, it talked about how AI spending was preventing our economy from going into a recession. It will be interesting to see how high the spending budget on AI will go.
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