AI investment props up US growth, but there is no sign yet of a turn to a faster trend

US growth has been boosted by artificial intelligence, but there is no sign of a turning point higher¹. Business investment has been a major prop to GDP growth that would otherwise seem laggard².

The economy grew at a 2.2% annual rate in the second quarter^6,7. A widening trade deficit and weaker government spending were offset by accelerating consumer spending and continued strength in business fixed investment⁶.

Demand has proven durable despite higher fuel prices, elevated interest rates and softer consumer sentiment, according to a forecast by Cox Automotive⁷. That durability has kept the headline growth figure respectable^6,7. The second-quarter mix, with strong investment and weaker government spending, shows where the support is coming from⁶.

The administration’s case and the evidence

The analysis starts from President Donald Trump’s promises in his 2025 inaugural address⁴. The administration argues that its policies, together with AI, can lift the economy’s potential¹.

If some combination of AI and Trump administration policies does reshape the supply side, it could let GDP grow faster^1,3. That is a conditional case, not a finding¹.

Treasury Secretary Scott Bessent said last week: “We have very durable tariff authorities”⁵. That is the government’s own assessment of its powers. Evidence on how much reshoring is actually under way has been limited, the analysis notes⁵.

At a basic level, GDP represents the number of people working, the analysis notes⁴. It finds no sign yet of the shift that would lift the trend¹.

Why it matters to investors

Growth that leans on one category of spending is exposed if that spending slows². Business investment, much of it tied to AI, has been doing work that would otherwise fall to a weaker underlying economy^2,6.

For equity investors, the question is whether AI spending is a temporary prop or the start of a higher trend¹. The current evidence supports the first reading more than the second^1,2.

For bond investors, a faster trend remains a possibility rather than an observed fact³. Consumer spending has accelerated even with higher fuel prices and elevated rates^6,7, which keeps demand firm in the meantime.

The next data on output and investment will show whether business spending is still carrying growth^2,6. The tariff programme’s effect on reshoring remains the least documented part of the administration’s case⁵.