 |
|
|
|||||
Spending on AI infrastructure is now contributing more to U.S. GDP growth than the entire consumer economy, according to new data from the Bureau of Economic Analysis. The comparison, which was posted to Twitter (X) by economist Heather Long on Monday, suggests that hype may not be the only thing propping up the high stock prices and valuations of AI companies such as Nvidia and OpenAI. Here, “consumption” means consumer spending on goods and services for personal use, which traditionally contributes about 70% of U.S. gross domestic product. “AI Spending” means business investment in software and information processing equipment, including data center construction, chip purchases, and computing infrastructure. The AI boom is fueling strong US economic growth. But it no longer eclipses consumption, based on the latest Q2 GDP data. How much did these things add to GDP growth in the first half of 2025?AI spending added 1.05 pp Consumption added 1.05 ppWe'll see what happens in Q3. pic.twitter.com/nQDhDsIgKH— Heather Long (@byHeatherLong) September 29, 2025 The numbers show that AI spending contributed 1.05% of total economic growth in the first half of 2025, after contributing only between .02% and .03% from 2022 through 2024 — a 4X to 5X growth ratio. The bad news (for the overall economy) is that consumer spending has fallen dramatically, from contributing 2.6% of GDP growth to just 1.05% in mid-2025. The decline could stem from flagging consumer confidence as the Trump tariffs take hold, and inflation fatigue and economic uncertainty continues. Heady times for AI companies This has all been good news for AI companies and their suppliers. Michael Cembalest, who is Chairman of Market and Investment strategy at J.P.Morgan, writes in a recent brief that since the appearance of ChatGPT in November 2022, AI-related stocks have accounted for 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending. OpenAI is now valued at $300 billion. Anthropic is valued at $183 billion. The AI spending is mainly focused on the new data centers that the AI industry says are necessary to deliver next generation services to both businesses and consumers. Now, Cembalest says, new data center spending is eclipsing new office construction for the first time. But he also points out that new data centers are coming under increased regulatory scrutiny because of their inordinate demands on the power grid. On the other hand, the BEA numbers suggest that the economy is increasingly dependent on one narrow segment, when a healthy economy would show broad corporate investments across sectors. That might be fine if AI infrastructure investment lasts, and if consumer confidence recovers. But investors typically abhor prolonged capital expenditures, especially if theres no sign of that infrastructure leading to measurable business efficiencies. And so far, the efficiencies brought by generative AI and new automation have been spotty.
Category:
E-Commerce
An experimental medication made from marijuana successfully reduced back pain in a new study, offering further support for the drugs potential in treating one of the most common forms of chronic pain. The 800-patient study by a German drugmaker is the latest evidence of the therapeutic properties of cannabis, which remains illegal under U.S. federal law even as most states have made it available for medical or recreational use. Health officials in Canada and Europe have previously approved a pharmaceutical-grade form of cannabis for several types of pain, including nerve pain due to multiple sclerosis. In the U.S., the Food and Drug Administration has approved a drug containing CBD one of the many non-intoxicating chemicals found in cannabis to treat rare seizures in children with epilepsy. Unlike that drug, known as Epidiolex, the new cannabis formula from drugmaker Vertanical contains THC, the active ingredient in marijuana that gets users high. But levels of the chemical are very low, essentially a microdose compared to whats available in gummies, chocolate bars, and other products sold at marijuana dispensaries in the U.S. The company said patients in the trial didnt show any signs of drug abuse, dependence, or withdrawal. Vertanical is seeking approval for a large group of patients: those suffering from lower-back pain, a chronic condition that affects millions and has few proven treatments. Over-the-counter pain relievers like ibuprofen cant be used for long-term pain because of their side effects, which include stomach ulcers and indigestion. Opioids are no longer recommended, after the overprescribing of painkillers such as OxyContin in the 1990s and 2000s led to the ongoing epidemic of addiction to that class of drug. Chronic pain is one of the most frequently cited conditions of people enrolled in state-run medical marijuana programs. But there’s been little rigorous research on the drug’s use in that group. Lead study author Dr. Matthias Karst said in an email that the new findings show cannabis “can significantly reduce pain and improve physical function in patients with chronic low-back pain, without the safety concerns commonly associated with opioids. Karst is a pain specialist at Hannover Medical School and a consultant for Vertanical. For the new study, patients with back pain were randomly assigned to take Vertanicals proprietary liquid cannabis extract or a placebo. At the end of 12 weeks, patients taking the medication reported a nearly 2-point reduction in pain on an 11-point scale, compared with 1.4 points for those taking placebo. The difference was statistically significant. Those getting the drug also reported improvements in sleep and physical function. Patients who continued with a six-month extension phase continued to experience reductions in pain. The results were published Monday in the journal Nature. Side effects included dizziness, headache, fatigue, and nausea, and led to more than 17% of people discontinuing the drug early. Researchers said that the dropout rate was lower than what’s typically reported with opioids, which can cause constipation, nausea, drowsiness, and carry risks of addiction. Vertanical has filed an application for its drug with European regulators. In the U.S., the company says it is working closely with regulators to design a study to support FDA approval. ___ The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institutes Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content. Matthew Perrone, AP health writer
Category:
E-Commerce
Comcast said on Monday it will appoint President Michael Cavanagh as co-CEO, adopting a dual chief executive model as the company prepares to spin off several NBCUniversal cable networks as part of a restructuring. Cavanagh will take up the new role in January and also join the company’s board, serving alongside Brian Roberts, who will continue as chairman and co-CEO. Several high-profile firms such as Oracle and Netflix have adopted a co-CEO model to better manage their operations as they become more complex and globally diversified. Comcast plans to spin off its NBCUniversal cable channels, including USA Network and CNBC, into a new company called Versant later this year amid shifting market dynamics and growing interest in streaming platforms. “He is the ideal person to help lead Comcast as we manage the pivot we are making to drive growth across the company,” Roberts said in a statement. Comcast is also planning a restructuring of its largest business unit, connectivity and platforms that includes Xfinity internet, mobile and pay TV services, Reuters reported earlier this month. It plans to eliminate a layer of management and cut jobs as part of efforts to centralize operations. The company is also working to turn around its broadband business, which has faced intense competition from wireless telecom providers that are aggressively promoting internet and mobile bundle deals. Comcast has responded by introducing national pricing, five-year price guarantees, and bundled mobile and broadband packages. Cavanagh joined Comcast as its finance chief in 2015. He was previously also the JPMorgan’s CFO for six years, and co-head of the financial giant’s corporate and investment bank. Harshita Mary Varghese, Reuters
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||