AI Spending: A New Engine for the Global Economy

The global economic landscape is currently defined by a resilient, AI-driven capital expenditure cycle that serves as a primary growth engine, particularly within the United States and Asia. While hyperscaler investment contributes roughly 40 basis points to U.S. GDP growth, its impact is even more pronounced in Asian economies like Korea, Taiwan, and Japan, where semiconductor exports have surged. This investment cycle is broadening beyond AI to encompass structural shifts in energy, defense, and industrial supply chain onshoring. In contrast, Europe remains in the early stages of this transition, grappling with fiscal constraints, aging-related costs, and a lack of private sector investment. With corporate balance sheets remaining robust, this multi-year super cycle is expected to persist for several years, though broader productivity gains from AI diffusion across non-tech sectors will likely not materialize until 2029 or later.