This one activity remained the largest driver of GDP growth in 2025 — not AI, according to a new report

A recent analysis challenges the notion that artificial intelligence is the primary catalyst for economic expansion in 2025. According to a report by Macro Research Board Partners, the real backbone of GDP growth was personal consumption, underscoring the vital role of everyday consumer spending in the economy. Authored by economic strategist Prajakta Bhide, the report indicates that while AI investment has contributed to growth, its impact is not as significant as previously believed. Bhide emphasizes that consumer spending remains the dominant force driving GDP, even amidst a landscape of increasing AI infrastructure investments. The report highlights that many high-tech products are imported, and these imports do not factor into GDP calculations. The key components of GDP—personal consumption, private domestic investment, government spending, and net exports—show that consumer behavior is crucial for economic health. Bhide notes that while the optimism surrounding AI could pose risks to GDP growth, the reality is more nuanced. Adjustments for imports reveal a more modest contribution of AI to overall economic growth, countering the widespread belief that the US economy would struggle without it. Additionally, concerns regarding the AI bubble extend beyond GDP impacts to the stock market and retirement savings. Major companies, including Nvidia and Apple, are heavily invested in AI, collectively valued at around $22 trillion. However, historical trends suggest that consumer spending typically weakens only in response to job losses and economic downturns, rather than being a precursor to them. In conclusion, the report serves as a reminder that while AI is influential, the strength of the economy is fundamentally rooted in the spending habits of consumers.