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When I told Lee that recent data showed U.S. GDP gaining momentum, he wasn’t surprised. As he put it, “AI is putting wind behind the economy’s back.” He’s right — and not because artificial intelligence is already generating massive profits, but because of the spending behind it.
AI Spending Is the New Industrial Stimulus
What’s lifting growth now isn’t consumer demand: it’s infrastructure. From data centers and chip foundries to electric utilities and fiber cabling, billions are being poured into the AI ecosystem. Companies like Nvidia (NASDAQ: NVDA) are selling record volumes of GPUs, while utilities expand capacity to power the next wave of computing.
That spending circulates across the economy: construction, logistics, real estate, and materials, creating a multiplier effect reminiscent of the early internet years.
Echoes of the Dot-Com Era
Lee compared today’s AI buildout to the internet expansion of the late 1990s, when firms like Cisco (NASDAQ: CSCO) laid the groundwork for what became the digital economy. Back then, infrastructure players thrived even when many “dot-com” businesses collapsed.
I noted that the same may hold true now: the providers of the hardware, networking, and power will capture early gains, even as AI-driven startups work to find sustainable business models.
A $1 Trillion Question for OpenAI
Lee pointed out growing unease on Wall Street about OpenAI’s massive capital commitments, reportedly as high as $1 trillion over time. He questioned where that money will come from: private equity, strategic partnerships, or another round of funding from existing allies like Microsoft (NASDAQ: MSFT) and Nvidia.
I joked that “Nvidia could just loan the money to OpenAI so they can use it to buy more Nvidia chips,” calling it the new financial “dance” regulators may someday need to examine.
Economic Tailwinds with Risks Ahead
Lee and I agreed that AI investment will bolster U.S. growth for several more quarters. But it also raises questions about sustainability: how long can infrastructure spending alone drive GDP before profitability has to catch up?
For now, the “AI buildout” remains a powerful, if unconventional, engine of U.S. economic momentum.
Transcript:
[00:00:04] Douglas: Lee. One of the things that’s become evident in the last two or three days is that there’s, it is clear that US GDP is being helped by the wind behind its back created by the AI industry, not by
[00:00:20] Douglas: money,
[00:00:20] Lee Jackson: Absolutely.
[00:00:21] Douglas: the money that is coming as revenue, but all the money it is spending. So there’s money, you know, there’s money being spent at utilities, there’s money being spent, you know, with Nvidia, these things, cabling. So what’s happening is, is that you’re actually seeing a strengthening US economy built to some large extent on the emergence of artificial intelligence.
[00:00:50] Lee Jackson: Right,
[00:00:52] Lee Jackson: right.
[00:00:52] Lee Jackson: and, and, and it’s somewhat reminiscent of the internet build out.
[00:00:58] Lee Jackson: Remember? I mean, that started kind of slow. And people are like, well, you know, and for, for, for people that don’t remember, people were too young. I mean, this was 97, 98, 99, the internet was incredibly slow. People had what was called dial up, you know, and they were, they were spending a fortune just to get the infrastructure in place and nobody was making any money.
[00:01:19] Lee Jackson: Then, but it, it took some time to come to fruition, but sure enough it did. And this could be a similar case?
[00:01:26] Douglas: you remember back then, people like Cisco, they were making real benefit.
[00:01:30] Douglas: The people who built the infrastructure of the internet made good money almost all along.
[00:01:38] Lee Jackson: We’re still, and we’re still and survivors even after the.com collapsed.
[00:01:43] Douglas: They were survivors, they were the companies that tried to utilize the internet as a, as a means to operate businesses. Many of those got killed, but if you were, if you were a provider of the pipes as they used to be known.
[00:01:57] Lee Jackson: Right.
[00:01:58] Douglas: good chance to make money just the same way right now as the utility.
[00:02:01] Douglas: They’re buying the electricity from you.
[00:02:04] Douglas: Everything’s already in place. So net net, that’s a nice margin
[00:02:08] Douglas: when people just want to, you know.
[00:02:10] Lee Jackson: Well, and they’re expecting third quarter GDP to be good. And I, I saw estimates go higher, you know, recently. And even though there is some lingering tariff issues, because it’s having, you know, it’s, it’s playing the, the, the devil with some of the pricing in the country. Uh, business as a whole appears to be very strong on a GDP.
[00:02:33] Lee Jackson: Uh, basis,
[00:02:35] Lee Jackson: it could be very strong in the fourth quarter.
[00:02:39] Douglas: There economy will benefit from the, just call it the AI build out for a number of quarters. Again,
[00:02:48] Douglas: this isn’t whether open AI gets paid money and it
[00:02:53] Douglas: It has to do with all the infrastructure and the system being built around being able to create artificial intelligence applications.
[00:03:03] Lee Jackson: Right. Well, and, and again, one of the issues is, and we’ll just combine this in, is that, uh, Wall Street’s starting to wonder because the numbers that I saw, and I’ve got ’em here, wall Street’s starting to question. How open AI is going to raise the 1 trillion they’ve spent. You know, how are they gonna raise it?
[00:03:26] Lee Jackson: Are they gonna go back to private equity? Where are they gonna go get this money? But one trillion’s a lot of dough. I don’t care who you are. And, um, I think that, I think there, that’s, that is worried that is in the right place because that’s a lot of money to raise that OpenAI has committed themselves to.
[00:03:43] Lee Jackson: So they
[00:03:44] Douglas: could round trip the money they could get Nvidia. Let’s get Nvidia to loan them the money. Okay,
[00:03:52] Douglas: I’ll let,
[00:03:52] Lee Jackson: Don’t think it.
[00:03:54] Douglas: Nvidia. has to go raise a trillion dollars
[00:03:58] Douglas: To open ai. So open AI can buy Nvidia chips that, see, that’s the new dance and it’s the dance that May is making people and that the SEC should address and never will.
[00:04:11] Lee Jackson: Well, we’ve discussed that and we’ll get back to that soon and see how it plays out. But yeah, one thing’s for sure. The, the money spent to expand and, uh, increase AI penetration and use,
[00:04:24] Lee Jackson: that will be a
[00:04:25] Lee Jackson: big boon for the economy.
[00:04:27] Douglas: Well, I don’t want to see Jensen Huang go to prison.
[00:04:31] Lee Jackson: No, I don’t think so.
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