A.I. Boom Is ‘the Only Reason We’re Not in a Recession’
Trending Topics Jakob Steinschaden
Reid Hoffman says AI data centers are propping up the U.S. economy. He calls them the only thing keeping America out of a recession.
Based on reporting by Trending Topics, Jakob Steinschaden — read the original for the full story.
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Reid Hoffman has a blunt take: the surge in AI data centers is doing more than feeding Silicon Valley’s appetite for compute. On the Newcomer podcast, the LinkedIn co-founder and investor said the build-out of AI infrastructure is “the only reason we’re not in a recession.” He also argued the money spreads far beyond tech, landing with construction workers, electricians, carpenters, real estate agents and lawyers around the country.
That’s not a neutral argument coming from Hoffman. He sits on Microsoft’s board, is a partner at Greylock, and has co-founded and backed several AI startups. Still, the broader case for his view has real numbers behind it. Harvard economist Jason Furman estimated that computer equipment and software were only about 4 percent of U.S. economic output last year, yet accounted for 92 percent of growth in the first half of 2025. Strip that out, he said, and growth would have been just 0.1 percent, though lower interest rates and electricity prices would have softened the blow.
Bridgewater has gone even further, saying AI investment could add about 1.4 percentage points to U.S. growth this year and 1.5 percentage points next year. The Federal Reserve has also found a meaningful effect, with AI investment adding about 0.6 percentage points to growth in the first quarter of 2026, when the economy expanded 1.6 percent overall. In that telling, AI is not a sideshow. It is a chunky piece of the expansion.
But the skeptics are not hard to find. Goldman Sachs chief economist Jan Hatzius said earlier this year that AI had contributed “basically zero” to U.S. growth, arguing that most data center spending is on imported chips and servers from Asia, which do not count the same way in GDP. Axios calculated that 0.75 percentage points of AI investment at the end of 2025 shrank to 0.14 percentage points once imports were removed. And the labor payoff looks thin: Bridgewater says a $1.5 billion Meta data center in Texas creates only about 100 permanent jobs, versus more than 1,600 for a battery plant of similar cost.
That may be why this debate has become political so quickly. Trump has moved to keep regulation light, scrapping Biden’s AI order and attacking state AI laws, while backing a voluntary White House accord with Google, Meta, Anthropic, OpenAI, Nvidia and xAI that carries no legal force. The money is real, the jobs are thinner than the hype, and everyone is pretending the same thing can do two different economic miracles at once.
My take — AI-written commentary, not fact-checked reporting
The whole AI boom is starting to look like a very expensive way to keep accountants busy and economists arguing. If a growth story mostly rests on imported chips, a few hundred permanent jobs, and voluntary promises from the same companies doing the spending, that’s not an industrial renaissance — that’s a subsidy with better branding. Европа, as usual, will get the power bills and the PowerPoint optimism.
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