Deutsche Bank has delivered a blunt warning: the U.S. economy may be leaning almost entirely on the AI boom to stay afloat. George Saravelos, the bank’s global head of FX research, said that without the explosion of capital spending on artificial intelligence, America might already be in recession. The claim is sparking debate because it suggests the so-called AI supercycle isn’t just boosting tech companies but holding up broader growth that would otherwise be faltering, according to Business Insider.
The logic is that massive investments in data centers, chips, and servers are masking weaknesses in consumer demand and traditional business spending. Saravelos even argued that the current level of AI capex is acting as a substitute for other growth drivers. That sounds fine while the money is pouring in, but it raises the question—what happens if the pace slows down?
Some analysts point out that this surge is coming from the hardware side: new factories, energy-hungry data centers, and supply chain buildouts. But the actual payoff from AI software and services still lags far behind. Futurism highlighted how much of the so-called AI growth is construction and infrastructure rather than real productivity gains, which means the long-term benefits are far from guaranteed.
Deutsche Bank’s note stresses that AI spending has to keep growing at a “parabolic” rate for the economy to hold steady. That kind of trajectory is difficult to maintain forever, and it brings back memories of the dot-com bubble, where hype and investment outpaced practical returns. Some fear that if investment stalls, it could reveal just how vulnerable the economy is beneath the surface.
Adding to the concern, the Times recently reported that Big Tech’s combined AI capex has ballooned into the hundreds of billions, increasing the risk of a major bust if expectations aren’t met. If the bubble bursts, it wouldn’t just be tech stocks taking the hit—construction, energy, and even labor markets tied to these mega-projects could feel the shockwaves.
For now, the AI boom is acting like a lifeline, but as Saravelos cautions, lifelines don’t last forever. If the frenzy cools and adoption doesn’t match investment, America’s apparent growth story could quickly unravel.