High-tech infrastructure—including major investments in data centers and information processing technology—is driving a substantial portion of U.S. economic growth so far this year, according to a Fortune report. The trend is prompting economists to debate whether the boom reflects a sustainable shift or the early signs of a bubble.
Harvard economist Jason Furman estimates that GDP growth would have been just 0.1% on an annualized basis without contributions from these technology-related sectors. His analysis underscores the growing role of high-tech infrastructure in shaping the broader macroeconomic environment.
While spending on information processing equipment and software made up only 4% of U.S. GDP in the first half of the year, it accounted for an outsized 92% of the total economic growth. Much of this surge comes from tens of billions of dollars being funneled into building and upgrading data centers by tech giants including Microsoft, Google, Amazon, Meta and Nvidia. The companies are racing to meet soaring demand for artificial intelligence applications, which require massive computing resources.
Capital expenditures by these "hyperscalers" have quadrupled in recent years to nearly $400 billion annually, according to Morgan Stanley Wealth Management Chief Investment Officer Lisa Shallet.
“The speed of growth and size of the investment are skewing its aggregate economic impact, with the top 10 spenders accounting for nearly a third of all spending,” Shallet noted. She estimates that data center-related activity is contributing roughly 100 basis points to real U.S. GDP growth.
This technology-driven expansion stands in contrast to broader signs of economic weakness, including slower job creation and underperformance in sectors like manufacturing and real estate. Some economists suggest the economy might have slipped into recession without the tech sector’s surge.
Morgan Stanley Chief Economist Michael Gapen explains that the current mix of strong spending and weak hiring reflects a corporate sector that has managed to absorb cost pressures—from tariffs to rising wages—by improving productivity and maintaining profitability, rather than raising prices.
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