Bridgewater CIOs warn AI spending wave could have a major effect on the US economy
Artificial Intelligence has emerged as one of the largest avenues of investment, with companies pouring trillions into its development. And, according to co-chief investment officers (CIOs) of Bridgewater Associates, a premier asset management firm, investments will continue to grow exponentially and reshape the economy, Reuters reported. AI has effectively settled into the position of being the driver of global corporate investment, driving the stock market rally, despite worries of a potential market bubble. However, its effect on the GDP growth is yet to be seen, according to a separate report from MRB Partners U.S. economic strategist Prajakta Bhide.
"Straightforward game-theoretic calculations make it unacceptable for these companies to accept falling behind rivals by even a few months of progress, so one company’s decision to spend more aggressively on AI capex compels others to follow," Bridgewater Associates' co-CIOs Bob Prince, Greg Jensen, and Karen Karniol-Tambour wrote in a client note shared on Monday. This falls in line with the bullish run of Wall Street's main indexes that closed 2025 with double-digit gains, supported by investor demands of AI-linked stocks such as Nvidia, Meta, and more.
On the other hand, Bridgewater CIOs added that a surge in AI capital spending could increase inflation as higher demand would push prices of items that play a key role in development, such as electronic chips and electricity. "Easy policy risks further accelerating speculative equity market activity and the frenzy of deal-making and AI investment that’s already underway, creating a ripe environment for a bubble, and risks enabling a cyclical overheating," the note added on the dynamics that could turn the tables against the Trump administration's campaign to win the AI race.
While the CIOs remained positive about AI spending boosting the economy, a January report from MRB Partners U.S. economic strategist Prajakta Bhide revealed that AI-related capital expenditures weren't the largest drivers of the U.S. GDP in 2025. “AI is an important part of the growth story, but it’s not the only part of the growth story. That’s a narrative that’s out there, that if we didn’t have the AI capex, GDP would have slumped last year. And that’s simply not true,” Bhide told CNBC in an interview. Stressing that consumption was the primary driver, he explained that a lot of high-tech equipment required for AI development is imported, thus, AI's GDP value is smaller than what's perceived.
Bhide's research further found that without making adjustments for imports, AI-related equipment added about 90 basis points, or 0.9%, to the real GDP growth of the country between the first and the third quarter of 2025. However, when considering the real imports of computers, parts, semiconductors, and related devices and telecom equipment, which are considered AI-related equipment, the net average contribution to the real GDP comes out to be even smaller at between 40 and 50 basis points or just about 20% to 25% of the growth between the same period. Furthermore, as per the report, while large datacenters grab most of the attention, investments in software and computers were AI’s most important contributions to GDP growth in 2025.
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