US economy's heavy dependence on AI sparks recession fears
The US economy is leaning hard on artificial intelligence (AI) investments right now—so much that nearly half of early 2025's GDP growth came from this sector.
Experts like Peter Berezin, chief global strategist at BCA Research, are raising eyebrows, warning that without AI's boost, a recession could be around the corner.
Tech giants are driving massive AI spending
Big names like Microsoft, Alphabet, Amazon, and Meta are set to invest $344 billion in AI this year—way up from last year's $228 billion. That's about 1.1% of the entire US GDP.
But even with all this spending and some new jobs in AI, overall tech employment still hasn't bounced back to pre-2022 levels.
What happens if the AI hype cools off?
Economists say if the market drops by 20-30%, it could shave up to 1.5% points off GDP.
The Federal Reserve is also keeping an eye out for sudden changes in how people feel about AI, since so much of today's economic growth depends on it.