{"id":21109,"date":"2026-02-12T09:20:30","date_gmt":"2026-02-12T09:20:30","guid":{"rendered":"https:\/\/microvibenews.com\/?p=21109"},"modified":"2026-02-12T09:20:30","modified_gmt":"2026-02-12T09:20:30","slug":"600bn-ai-splurge-could-keep-us-growth-humming","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=21109","title":{"rendered":"$600bn AI splurge could keep US growth humming"},"content":{"rendered":"<p><\/p>\n<div>\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1645177?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>SIMON BROWN:<\/strong> I\u2019m chatting now with Maarten Ackerman, chief economist at Citadel. Maarten, appreciate the early morning. I want to kick off with the big numbers doing the rounds. AI capex spend in the US \u2013 well over $600\u00a0billion expected. Does it almost ensure that US GDP growth remains robust during the year if you\u2019ve got $600\u00a0billion going into AI capex?<\/p>\n<p><strong>MAARTEN ACKERMAN:<\/strong> Good morning Simon. It is fascinating, the amount of capital that, that is sucking in at the moment. Given the fact that the US is way more competitive in that space, there\u2019s no alternative. If we look at global capital flows in terms of going into that space, it all goes to the US. There\u2019s a little bit going into places like Europe, India and where there are alternatives. That adds to the US competitiveness; it underpins corporate earnings and the markets.<\/p>\n<p>You\u2019re 100% right. That is definitely a major contributor now to the resilience of the US economy. Just to give you an idea in terms of contribution to US GDP, it\u2019s typically 70% consumers. Now, almost a third of that is actually capex spend on AI. So suddenly it\u2019s becoming not only a consumer-based economy but call it, if you like, a tech economy. That\u2019s part of the reason why the tariffs didn\u2019t really impact as much as most people expected.<\/p>\n<p>Read:<br \/>Trump says Fed pick Warsh can get economy to hit 15% growth<br \/>AI \u2018contagion channels\u2019 show huge economic risk if bubble bursts<\/p>\n<p><strong>SIMON BROWN:<\/strong> Absolutely. There\u2019s been very little impact on the tariffs. There has \u00a0also been very little success in getting the debt down. They\u2019ve still got the government debt as an issue \u2013 it\u2019s frankly getting worse. Lower rates from the Fed might not do much, but a weaker dollar and perhaps some inflation does help. I\u2019ve always thought this is an emerging market strategy. But if you\u2019ve got a lot of government debt, well, weaken your currency, let some inflation run.<\/p>\n<p>Is that a viable option for the US? Certainly, I\u2019m looking at the dollar index, and we\u2019re seeing dollar weakness. Trump doesn\u2019t mind dollar weakness.<\/p>\n<p><strong>MAARTEN ACKERMAN:<\/strong> I know, we all focus on the US and we haven\u2019t even noticed. Some people haven\u2019t even noticed [the surge in] bond yields in Japan \u2026 recently.<\/p>\n<p>That\u2019s a developed market story where most of them are running huge excess debt, massive deficits, and we\u2019ve seen across the board that long-term bond yields are going up for different reasons. Europe is more all fiscal spend on defence. But to answer you, in the US, yes, that\u2019s been a long debate in terms of how sustainable this is. Trump with his \u2018big, beautiful bill\u2019 is likely to run a deficit in line with what we\u2019ve seen in Covid.<\/p>\n<p>Covid we understand \u2013 that was where they had to chip in to support households and get their economy going. They\u2019re not in that kind of environment now \u2013 and still they are \u00a0going on plan to spend the same kind of money. So yes, there\u2019s a huge question mark. I have a question mark about sustainability.<\/p>\n<p>But there is a big difference between emerging markets. If you think about SA, we get close to 80% [of GDP] and everyone\u2019s up in arms. The US is already running north of 120% of GDP. That boils down \u2013 even in this environment where there are a lot of question marks around the dollar \u2013 to the dollar still being the reference currency. So investors are okay accepting those higher debt levels, given that interest payments happen in the reserve currency of the world.<\/p>\n<p>I always say it\u2019s almost like they\u2019re very unlikely to default because they can print their payments. There is still enough demand for US dollars where they can manage those kinds of debt levels.<\/p>\n<p><strong>SIMON BROWN:<\/strong> They remain the reserve currency, and that is a huge benefit to the US and to the US dollar.<\/p>\n<p>You mentioned Europe. You mentioned defence. Looking at Europe, the defence spending is certainly improving \u2013 I\u2019m not sure sustainable. They don\u2019t really have AI spend. They\u2019ve high energy costs. Europe looks like a region that is going to frankly continue to \u2018muddle along\u2019, which is probably the phrase I\u2019m looking for.<\/p>\n<p><strong>MAARTEN ACKERMAN:<\/strong> Yes. Unfortunately they\u2019ve got a lot of things against them \u2013 an aging population, being way less productive compared to the US. They have no advantage in the tech AI space. They are between the Chinese dumping cheap products in their markets and the US putting tariffs on their products. So they\u2019re really getting squeezed there. By the way, they sold a lot of vehicles into China, which has now stopped because the Chinese are just producing their own. So they are going to battle.<\/p>\n<p>Fortunately consumers in Europe are slightly more positive for some reason, compared to their counterparts in the US. Unemployment is fairly well contained, and their financial situation looks reasonable. So at least there is a bit of a consumer story there. But for the rest \u2013 the industrial engine in Europe \u2013 I agree, they\u2019re really going to struggle to get up.<\/p>\n<p>The bit of activity we saw last year is exactly just defence. They\u2019ve had huge fiscal spend. Touch wood, it\u2019s probably going to be a once-off because, if you start building tanks and bullets and you don\u2019t use them, it\u2019s a once-off kind of spend \u2013 and that\u2019s a concern. If you had that similar kind of fiscal support and it went into long-term infrastructure and productive assets, then you could start building a case for high growth potential for Europe.<\/p>\n<p>But we unfortunately think that Europe will keep lagging [behind] places like the US in terms of their growth potential.<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes. I hadn\u2019t thought about that around defence spending. Assuming there\u2019s no war, it is one-off. You\u2019ve built that tank, you\u2019ve now got that tank.<\/p>\n<p>Martin Ackerman, chief economist at Citadel, I always appreciate the early morning time.<\/p>\n<p>Listen to the full MoneywebNOW podcast every weekday morning here.<\/p>\n<\/p><\/div>\n<p><script data-cfasync=\"false\">\n            !function(f,b,e,v,n,t,s)\n            {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n                n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n                if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n                n.queue=[];t=b.createElement(e);t.async=!0;\n                t.src=v;s=b.getElementsByTagName(e)[0];\n                s.parentNode.insertBefore(t,s)}(window, document,'script',\n                'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n            fbq('init', '779812924991616');\n            fbq('track', 'PageView');\n        <\/script>#600bn #splurge #growth #humming<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this po&hellip; <\/p>\n","protected":false},"author":1,"featured_media":21110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[12788,567,12790,12789],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/21109"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21109"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/21109\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/21110"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}