AI investment is the only thing keeping the US out of recession

AI spending is keeping the US economy out of recession, with datacenter infrastructure and model development providing the only significant growth amid trade turmoil, tariff shocks, and high borrowing costs.

This is offsetting the drag from higher interest rates and the impact of the Trump administration's chaotic trade policies, numerous sources say.

"AI has kept the economy out of a recession," BNP Paribas chief US economist James Egelhof told Yahoo Finance this week, noting the spending boom has convinced businesses that robust growth and a productivity surge are imminent.

Apollo Global Management chief economist Torsten Sløk wrote yesterday: "There is basically no growth in corporate capex outside of AI at the moment."

Unlike typical investment patterns, AI spending hasn't fallen despite Federal Reserve rate hikes because, Sløk noted, datacenter investment is ultimately financed by rising equity valuations of the "Magnificent Seven" including Microsoft, Amazon, Alphabet, and Nvidia.

Analyst ...