QUESTION: What are the key drivers behind the GDP revision—especially consumer spending and AI-related intellectual property investment—and how likely are those trends to continue?
RESPONSE: The key drivers behind the GDP revision include significant AI-related capital expenditures and consumer spending. According to Neil Dutta, head of economic research at Renaissance Macro Research, AI spending, defined as information processing equipment plus software, has added more to GDP growth than consumer spending in the recent quarters[1][2]. This indicates a substantial shift in the economic landscape where AI investments are becoming a more prominent contributor to GDP growth.
As for the likelihood of these trends continuing, the ongoing focus on AI as a driver of productivity and new business models suggests that AI-related investments will likely remain significant. The AI revolution is described as “if anything underhyped,” indicating that there is still considerable potential for growth in this area[3][4]. However, it’s important to note that while AI spending is high, there are concerns about the measurable returns from these investments, as highlighted by a study from MIT’s Nanda Initiative[5][6]. This could influence future investment decisions if returns do not meet expectations.
Consumer spending, on the other hand, has traditionally been a stable component of GDP growth. The current economic environment, characterized by strong consumer spending and low energy costs, particularly in regions like Spain, supports continued consumer expenditure as a growth driver[7]. However, external factors such as changes in energy prices or economic policies could impact this trend.
Overall, while AI-related investments are likely to continue playing a significant role in GDP growth, the sustainability of these trends will depend on the realization of expected returns and broader economic conditions.
References
[1] Capital Spending As The Key Market Driver? [Forbes]
Shockingly, according to a post by Neil Dutta, head of economic research at Renaissance Macro Research, AI spending exceeded consumer expenditures in the last two quarters, as shown in the graphic below.
https://www.forbes.com/sites/randywatts/2025/08/14/capital-spending-as-the-key-market-driver/
[2] Capital Spending As The Key Market Driver? [Forbes]
“So far this year, AI capital expenditures (capex), which we define as information processing equipment plus software, have added more to GDP growth than consumer spending,” Dutta said.
https://www.forbes.com/sites/randywatts/2025/08/14/capital-spending-as-the-key-market-driver/
[3] Proper Adoption Of AI Requires A Fundamental Change In Culture [Forbes]
But , a former senior executive with Oracle, Siebel Systems and Salesforce who is now an active investor in technology businesses, believes that, rather than being overhyped, the AI revolution is “if anything underhyped.”
https://www.forbes.com/sites/rogertrapp/2025/07/20/proper-adoption-of-ai-requires-a-fundamental-change-in-culture/
[4] AI’s $1 Trillion Shakeout: Bubble, Correction, Or Market Reset [Forbes]
But the underlying trend of AI as a driver of productivity, transformation, and new business models is only beginning.
https://www.forbes.com/sites/markminevich/2025/08/26/ais-1-trillion-shakeout-bubble-correction-or-market-reset/
[5] More drops for Nvidia, Palantir and other AI stars drag Wall Street lower
One possible contributor to the swoon was a study from MIT’s Nanda Initiative that warned most corporations are not yet seeing any measurable return from their generative AI investments, according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management.
[6] Wall Street steadies after Nvidia, Palantir and other AI stars trim their losses
One possible contributor to the swoon was a study from MIT’s Nanda Initiative that warned that most corporations are not yet seeing any measurable return from their generative AI investments, according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management.
[7] Why Spain’s economy is booming – and what could derail its growth [CNBC]
A mix of tourism, EU funding, immigration and foreign investment have helped drive growth, alongside strong consumer spending and low energy costs.
https://www.cnbc.com/video/2025/08/23/why-spains-economy-is-booming-and-what-could-derail-its-growth.html