AI Investment Surge Fuels Tangible Growth in the Economy

As anticipation builds around the upcoming earnings report from chip giant Nvidia, it is evident that excitement about the potential financial gains from artificial intelligence is buoying the stock market.

Beyond market speculation, recent trends reveal that investments in AI are also generating significant momentum within the broader economy.

This economic boost does not primarily stem from how companies currently deploy AI technologies. Instead, it arises from the vast capital flowing into the infrastructure essential to support AI's immense computing demands—such as data centers, semiconductor manufacturing facilities, and power systems—stimulating wide-ranging business activity.

Investment bank UBS estimates that global spending on AI infrastructure will reach $375 billion in 2025 and climb to $500 billion the following year. According to Commerce Department data, expenditures on software and computer equipment—excluding data center buildings—accounted for roughly 25% of all economic growth over the past year.

These figures likely underestimate the true impact, as government data collectors have historically struggled to accurately quantify the value of semiconductors and computing equipment installed by major tech firms like Meta and Alphabet for internal use rather than outsourced contracts, suggesting the overall economic contribution is even greater.

While leading technology companies spearhead much of this investment surge, private equity firms have also committed substantial capital. Brookfield Asset Management, managing an extensive real estate portfolio, projects that AI infrastructure investments will total around $7 trillion over the next decade.

This influx of capital comes at a time when the economic stimulus from infrastructure subsidies has waned, tariff uncertainties have stalled corporate planning, and elevated borrowing costs have discouraged investments in less profitable real estate projects like housing and warehouses. In fact, data center construction spending in 2025—excluding associated technology costs—is expected to surpass investments in traditional office buildings, according to the Dodge Construction Network.