{"id":192943,"date":"2025-12-15T13:21:07","date_gmt":"2025-12-15T13:21:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/192943\/"},"modified":"2025-12-15T13:21:07","modified_gmt":"2025-12-15T13:21:07","slug":"bubble-or-not-ai-spending-is-keeping-the-us-economy-humming","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/192943\/","title":{"rendered":"Bubble or not, AI spending is keeping the US economy humming"},"content":{"rendered":"

US companies are becoming increasingly hooked on artificial intelligence<\/a> spending, and questions are growing whether this investment boom is hiding a weaker economic picture.<\/p>\n

Despite a contraction in the first quarter, following President Donald Trump’s sweeping tariff<\/a> announcement, the US economy has defied slowdown expectations this year, with estimations of 2025 GDP growth ranging between 1.7 per cent and 3 per cent.<\/p>\n

While moderate increases in tariffs have partially contributed to these revisions, there is another engine behind US growth this year: AI.<\/p>\n

Analysis from global investment firm KKR found that AI-related capex for the four largest hyper-scalers was more than $350 billion this year. UBS said it forecasts global AI capex spending to hit $423 billion in 2025 (up from its previous $375 billion estimate), before eclipsing $500 billion next year.<\/p>\n

Tim Bajarin, a technology analyst who has served as a consultant for Apple, IBM, Xerox and Microsoft, said that there\u2019s \u201ccause for concern\u201d as to whether the economic growth is substantive, but dismissed comparisons to the 1990s-era dotcom bubble.<\/p>\n

\u201cThe fundamentals are strong compared to other hype cycles,\u201d Mr Bajarin said, noting how AI tools such as Gemini and ChatGPT<\/a> have hundreds of millions of users.<\/p>\n

\u201cThe AI technology is richer, deeper and more focused.” He added that the billions of dollars being poured into data centres have \u201clasting value\u201d.<\/p>\n

AI in the data<\/p>\n

New projections released by the US Federal Reserve showed America’s economy will expand at a 2.3 per cent pace next year, an increase of half a percentage point from its September forecast. <\/p>\n

Part of this has been resilient consumer spending, Fed chairman Jerome Powell told reporters last week. <\/p>\n

\u201cAnd, to another degree it is \u2026 that AI spending on data centres and related to AI that has been holding up business investment,\u201d he said.<\/p>\n

The AI boom has led to strong growth in business equipment investment this year. Investment in equipment and software related to AI is forecast to grow by 9.9 per cent this year, according to the Equipment Leasing and Finance Foundation.<\/p>\n

And while tariffs have weighed down exports and imports, Matthew Martin, senior US economist at Oxford Economics, estimated that imports for computers and semiconductors are up between 40 per cent and 50 per cent year-on-year.<\/p>\n

\u201cSo the fact that imports are still growing there, despite increased tariffs, obviously shows that there’s quite a bit of strength there,\u201d he said.<\/p>\n

With demand for data centres<\/a> increasing, concerns are mounting over the rising energy costs for these large-scale infrastructure projects that require huge amounts of energy to function.<\/p>\n

The International Energy Agency projects global electricity demand from data centres to more than double over the next five years, with the effects to be most felt in the US and Japan. Those rising energy costs, in turn, ultimately would be passed on to consumers in the form of higher electricity bills, potentially blunting economic growth and constraining spending.<\/p>\n

\u201cI think energy is a major constraint to the building of these,\u201d said Sean McDevitt, a partner at global consulting firm Arthur D Little.<\/p>\n

\u201cWe’re not talking about megawatt data centres any more. These are gigawatt data centres. We’re not talking about buildings \u2026 These things look like industrial zones now.\u201d<\/p>\n

Natalie Hwang, founding managing partner at Apeira Capital, said she believes energy costs define the AI story rather than weaken it.<\/p>\n

\u201cAnd the next phase of AI will be led by the companies and the regions that can deliver intelligence with the lowest energy footprint,\u201d pointing in particular to the Middle East’s energy abundance.<\/p>\n

Record valuations<\/p>\n

Concerns around rising energy costs have led to recent market turbulence, as has the future profit of companies relying on AI, testing market resilience that has ridden the investment boom this year.<\/p>\n

AI spending has helped US markets overcome April’s tariff blip to continue a remarkable bull run, with all three Wall Street indices closing at record highs on several occasions this year. <\/p>\n

The top five companies in the S&P 500 \u2013 Nvidia<\/a>, Apple<\/a>, Microsoft, Amazon and Alphabet \u2013 make up roughly 30 per cent of the tech-heavy index.<\/p>\n

The Fed, International Monetary Fund and other financial institutions have characterised these AI valuations as \u201cstretched\u201d, leading to new debate over the potential of a bubble<\/a> and a possible market correction if productivity gains are not fully realised.<\/p>\n

But economists and analysts also argue that, unlike the dot-com bubble three decades ago, the companies at the nexus of the AI investment frenzy are posting profits and have business models.<\/p>\n

\u201cIf we see a correction next year, I believe it will clarify the investment opportunity in AI infrastructure, rather than weaken it. Because a market reset typically shifts capital from speculation to fundamentals,\u201d Ms Hwang said.<\/p>\n

Boom to continue<\/p>\n

Hyper-scalers show no signs of slowing down their AI spending. <\/p>\n

Alphabet, Amazon, Meta, Microsoft and Oracle have all raised their AI capex guidance, according to their most recent earnings reports. Private companies like Anthropic and OpenAI are also making large investment commitments.<\/p>\n

And the increase in demand is expected to have compounding effects on the US economy with spending on construction, technology and energy required to bring those types of facilities online.<\/p>\n

\u201cAI is an industrial infrastructure story,\u201d Mr McDevitt said.<\/p>\n

The AI spending comes as the US exhibits some stagflationary behaviour, with the world’s largest economy faced with higher inflation and lower job gains.<\/p>\n

A US AI pulse survey released by accounting firm EY earlier this month found companies investing in AI are seeing AI-driven productivity gains. And, while some companies are making AI-related layoffs, the survey found most productivity gains are being reinvested to upskill talent and boost resilience.<\/p>\n

Mr Martin said productivity gains could potentially weigh on hiring, as companies can now do more with fewer employees, but stronger economic growth could lead to higher job creation elsewhere. At the same time, it could be positive for the inflation outlook because companies can increase employees’ wages without having to raise prices by a large amount.<\/p>\n

\u201cI think there’s a lot of uncertainty, but ultimately, the increased productivity would be a very positive for the economy overall,\u201d Mr Martin said.<\/p>\n

MATCH INFO<\/p>\n

AC Milan v Inter, Sunday, 6pm (UAE), match live on BeIN Sports<\/p>\n

Dubai\u00a0World\u00a0Cup\u00a0factbox<\/p>\n

Most\u00a0wins\u00a0by\u00a0a\u00a0trainer:\u00a0Godolphin\u2019s\u00a0Saeed\u00a0bin\u00a0Suroor(9)<\/p>\n

Most\u00a0wins\u00a0by\u00a0a\u00a0jockey:\u00a0Jerry\u00a0Bailey(4)<\/p>\n

Most\u00a0wins\u00a0by\u00a0an\u00a0owner:\u00a0Godolphin(9)<\/p>\n

Most\u00a0wins\u00a0by\u00a0a\u00a0horse:\u00a0Godolphin\u2019s\u00a0Thunder\u00a0Snow(2)<\/p>\n

COMPANY%20PROFILE%20<\/p>\n

%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi’s%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A<\/p>\n

Red Sparrow<\/p>\n

Dir: Francis Lawrence<\/p>\n

Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons<\/p>\n

Three stars<\/p>\n

How much do leading UAE\u2019s UK curriculum schools charge for Year 6?
\nNord Anglia International School (Dubai) \u2013 Dh85,032
\nKings School Al Barsha (Dubai) \u2013 Dh71,905
\nBrighton College Abu Dhabi – Dh68,560
\nJumeirah English Speaking School (Dubai) \u2013 Dh59,728
\nGems Wellington International School \u2013 Dubai Branch \u2013 Dh58,488
\nThe British School Al Khubairat (Abu Dhabi) – Dh54,170
\nDubai English Speaking School \u2013 Dh51,269<\/p>\n

*Annual tuition fees covering the 2024\/2025 academic year<\/p>\n

RESULT<\/p>\n

Bournemouth 0 Southampton 3 (Djenepo\u00a0(37′, Redmond 45′ 1, 59′)<\/p>\n

Man of the match Nathan Redmond (Southampton)<\/p>\n

Full Party in the Park line-up<\/p>\n

2pm \u2013 Andreah<\/p>\n

3pm \u2013 Supernovas<\/p>\n

4.30pm \u2013 The Boxtones<\/p>\n

5.30pm \u2013 Lighthouse Family<\/p>\n

7pm \u2013 Step On DJs<\/p>\n

8pm \u2013 Richard Ashcroft<\/p>\n

9.30pm \u2013 Chris Wright<\/p>\n

10pm \u2013 Fatboy Slim<\/p>\n

11pm \u2013 Hollaphonic<\/p>\n

\u00a0<\/p>\n

Gender pay parity on track in the UAE<\/p>\n

The UAE has a good record on gender pay parity, according to Mercer’s Total Remuneration Study.<\/p>\n

“In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better,” said\u00a0Ted Raffoul, career products leader, Mena at Mercer. “I am yet to see a company in the UAE \u2013 particularly when you are looking at a blue chip multinationals or some of the bigger local companies \u2013\u00a0that actively discriminates when it comes to gender on pay.”<\/p>\n

Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn\u00a0whereas women are meant to start a family.<\/p>\n

“For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that\u2019s not due to any companies\u00a0having a policy penalising women for any reasons \u2013 it\u2019s a cultural thing,” he said.<\/p>\n

As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes\u00a0to help working mothers and the\u00a0career development of women in general.\u00a0<\/p>\n

The\u00a0specs<\/p>\n

Engine:\u00a03.8-litre\u00a0V6<\/p>\n

Power:\u00a0295hp\u00a0at\u00a06,000rpm<\/p>\n

Torque:\u00a0355Nm\u00a0at\u00a05,200rpm<\/p>\n

Transmission:\u00a08-speed\u00a0auto<\/p>\n

Fuel\u00a0consumption:\u00a010.7L\/100km<\/p>\n

Price:\u00a0Dh179,999-plus<\/p>\n

On\u00a0sale:\u00a0now\u00a0<\/p>\n

The specs<\/p>\n

A4 35 TFSI<\/p>\n

Engine: 2.0-litre, four-cylinder<\/p>\n

Transmission: seven-speed S-tronic automatic<\/p>\n

Power: 150bhp<\/p>\n

Torque: 270Nm<\/p>\n

Price: Dh150,000 (estimate)<\/p>\n

On sale: First Q 2020<\/p>\n

A4 S4 TDI<\/p>\n

Engine: 3.0-litre V6 turbo diesel<\/p>\n

Transmission: eight-speed PDK automatic<\/p>\n

Power: 350bhp<\/p>\n

Torque: 700Nm<\/p>\n

Price: Dh165,000 (estimate)<\/p>\n

On sale: First Q 2020<\/p>\n

UAE currency: the story behind the money in your pocketsHow to join and use Abu Dhabi\u2019s public libraries<\/p>\n

\u2022\u00a0There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.<\/p>\n

\u2022\u00a0Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm\u00a0on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.<\/p>\n

\u2022\u00a0In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.<\/p>\n

\u2022\u00a0If users do not wish to pay the fee, they can still use the library\u2019s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.<\/p>\n

\u2022 For more information visit the\u00a0library network’s website<\/a>.<\/p>\n

Read more about the coronavirusCOMPANY%20PROFILE<\/p>\n

%3Cp%3E%3Cstrong%3ECompany%3A%20%3C%2Fstrong%3EGrowdash%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJuly%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3ESean%20Trevaskis%20and%20Enver%20Sorkun%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%2C%20UAE%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%20%3C%2Fstrong%3ERestaurant%20technology%0D%3Cbr%3E%3Cstrong%3EFunding%20so%20far%3A%3C%2Fstrong%3E%20%24750%2C000%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Plus%20VC%2C%20Judah%20VC%2C%20TPN%20Investments%20and%20angel%20investors%2C%20including%20former%20Talabat%20chief%20executive%20Abdulhamid%20Alomar%2C%20and%20entrepreneur%20Zeid%20Husban%3C%2Fp%3E%0A<\/p>\n

Notable salonni\u00e8res of the Middle East through history<\/p>\n

Al Khasan (Okaz, Saudi Arabia)<\/p>\n

Tamadir bint Amr Al Harith, known simply as Al Khasan, was a poet from Najd famed for elegies, earning great renown for the eulogy of her brothers Mu\u2019awiyah and Sakhr, both killed in tribal wars. Although not a salonni\u00e8re, this prestigious 7th century poet fostered a culture of literary criticism and could be found standing in the souq of Okaz and reciting her poetry, publicly pronouncing her views and inviting others to join in the debate on scholarship. She later converted to Islam.<\/p>\n

\u00a0<\/p>\n

Maryana Marrash (Aleppo)<\/p>\n

A poet and writer, Marrash helped revive the tradition of the salon and was an active part of the Nadha movement, or Arab Renaissance. Born to an established family in Aleppo in Ottoman Syria in 1848, Marrash was educated at missionary schools in Aleppo and Beirut at a time when many women did not receive an education. After touring Europe, she began to host salons where writers played chess and cards, competed in the art of poetry, and discussed literature and politics. An accomplished singer and canon player, music and dancing were a part of these evenings.<\/p>\n

\u00a0<\/p>\n

Princess Nazil Fadil (Cairo)<\/p>\n

Princess Nazil Fadil gathered religious, literary and political elite together at her Cairo palace, although she stopped short of inviting women. The princess, a niece of Khedive Ismail, believed that Egypt\u2019s situation could only be solved through education and she donated her own property to help fund the first modern Egyptian University in Cairo.<\/p>\n

\u00a0<\/p>\n

Mayy Ziyadah (Cairo)<\/p>\n

Ziyadah was the first to entertain both men and women at her Cairo salon, founded in 1913. The writer, poet, public speaker and critic, her writing explored language, religious identity, language, nationalism and hierarchy. Born in Nazareth, Palestine, to a Lebanese father and Palestinian mother, her salon was open to different social classes and earned comparisons with souq of where Al Khansa herself once recited.<\/p>\n

Courses%20at%20Istituto%20Marangoni%2C%20Dubai<\/p>\n

%3Cp%3E%3Cstrong%3EUndergraduate%20courses%3C%2Fstrong%3E%3Cbr%3EInterior%20Design%3B%20Product%20Design%3B%20Visual%20Design%3B%20Fashion%20Design%20%26amp%3B%20Accessories%3B%20Fashion%20Styling%20%26amp%3B%20Creative%20Direction%3B%20Fashion%20Business%3B%20Foundation%20in%20Fashion%3B%20Foundation%20in%20Design%3Cbr%3E%3Cstrong%3EProfessional%20courses%3C%2Fstrong%3E%3Cbr%3EFashion%20e-Commerce%20%26amp%3B%20Digital%20Marketing%3B%20Fashion%20Entrepreneurship%3B%20Fashion%20Luxury%20Retail%20and%20Visual%20Merchandising%3Cbr%3E%3Cstrong%3EShort%20courses%3C%2Fstrong%3E%3Cbr%3EFashion%20design%3B%20Fashion%20Image%20%26amp%3B%20Styling%3B%20Fashion%20Trend%20Forecasting%3B%20Interior%20Design%3B%20Digital%20Art%20in%20Fashion%3Cbr%3EMore%20information%20is%20at%20%3Ca%20href%3D%22https%3A%2F%2Fwww.istitutomarangoni.com%2Fen%3Futm_source%3DLocal%26utm_medium%3Dorganic%26utm_campaign%3Dgmb%26utm_content%3Ddubai%22%20target%3D%22_self%22%3Ewww.istitutomarangoni.com%3C%2Fa%3E%3C%2Fp%3E%0A<\/p>\n

Schedule:<\/p>\n

Sept 15:\u00a0Bangladesh v Sri Lanka\u00a0(Dubai)<\/p>\n

Sept 16:\u00a0Pakistan v Qualifier (Dubai)<\/p>\n

Sept 17:\u00a0Sri Lanka v Afghanistan\u00a0(Abu\u00a0Dhabi)<\/p>\n

Sept 18: India v Qualifier (Dubai)<\/p>\n

Sept 19: India v Pakistan (Dubai)<\/p>\n

Sept 20: Bangladesh v Afghanistan\u00a0(Abu Dhabi) Super Four<\/p>\n

Sept 21: Group A Winner v Group B\u00a0Runner-up (Dubai)\u00a0<\/p>\n

Sept 21: Group B Winner v Group A\u00a0Runner-up (Abu Dhabi)<\/p>\n

Sept 23: Group A Winner v Group A Runner-up (Dubai)<\/p>\n

Sept 23: Group B Winner v Group B\u00a0Runner-up (Abu Dhabi)<\/p>\n

Sept 25: Group A Winner v Group B\u00a0Winner (Dubai)<\/p>\n

Sept 26: Group A Runner-up v Group B\u00a0Runner-up (Abu Dhabi)<\/p>\n

Sept 28: Final (Dubai)<\/p>\n

2024%20Dubai%20Marathon%20Results<\/p>\n

%3Cp%3E%3Cstrong%3EWomen%E2%80%99s%20race%3A%3C%2Fstrong%3E%0D%3Cbr%3E1.%20Tigist%20Ketema%20(ETH)%202hrs%2016min%207sec%0D%3Cbr%3E2.%20Ruti%20Aga%20(ETH)%202%3A18%3A09%0D%3Cbr%3E3.%20Dera%20Dida%20(ETH)%202%3A19%3A29%0D%3Cbr%3EMen’s%20race%3A%0D%3Cbr%3E1.%20Addisu%20Gobena%20(ETH)%202%3A05%3A01%0D%3Cbr%3E2.%20Lemi%20Dumicha%20(ETH)%202%3A05%3A20%0D%3Cbr%3E3.%20DejeneMegersa%20(ETH)%202%3A05%3A42%3C%2Fp%3E%0A<\/p>\n","protected":false},"excerpt":{"rendered":"US companies are becoming increasingly hooked on artificial intelligence spending, and questions are growing whether this investment boom…\n","protected":false},"author":2,"featured_media":192944,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[218,72,7889,113,61,60,1284,329,80],"class_list":["post-192943","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-artificial-intelligence","tag-business","tag-business-team","tag-economy","tag-ie","tag-ireland","tag-standard","tag-story","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/192943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=192943"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/192943\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/192944"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=192943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=192943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=192943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}