Consumer spending, not investment in artificial intelligence, was the primary driver of U.S. economic growth last year, countering a dominant narrative that AI capital expenditures were the economy's main fuel.
Consumption was the most crucial contributor to GDP growth in 2025, according to a January report from MRB Partners U.S. economic strategist Prajakta Bhide. While AI-related capital expenditures played a meaningful role, they ranked second behind household spending as a source of economic momentum.
"AI is an important part of the growth story, but it's not the only part of the growth story," Bhide told CNBC. "That's a narrative that's out there, that if we didn't have the AI capex, GDP would have slumped last year. And that's simply not true."
One reason AI's impact appears smaller in GDP data is the composition of the spending itself. A significant share of high-tech equipment tied to artificial intelligence is imported and imports are excluded from GDP calculations, which measure consumption, investment, government spending and net exports.
According to Bhide's research, AI-related components added roughly 90 basis points to real GDP growth on average between the first and third quarters of 2025, accounting for just under 40% of total growth during that period. After adjusting for imports of AI-related equipment, including computers, semiconductors and telecom devices, the net contribution drops to between 40 and 50 bps or about 20% to 25% of real GDP growth.
Software and computer investments were the largest AI-related contributors to GDP, even as data center development drew much of the public attention.
Meanwhile, overall economic growth exceeded expectations. Real GDP rose at a 4.3% annualized rate in the third quarter of 2025, following 3.3% growth in the second quarter. The first quarter saw a 0.3% contraction, marking the first quarterly decline since early 2022.
Bhide said the data underscores the continued strength of the U.S. consumer, which she expects to remain a key pillar of expansion in 2026, even as income growth slows and wealth becomes more concentrated among top earners.
"You do have the support coming from the fiscal side, and that gives you a little bit of an offset for the aggregate income growth being maybe not as strong as last year," Bhide told CNBC.
"The U.S. consumer is still, in our view, in good shape."
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