How the U.S. Economy Became Hooked on AI Spending

The turbulence that hit stocks tied to artificial intelligence last week highlights a broader risk to the economy. Growth has become so dependent on AI-related investment and wealth that if the boom turns to bust, it could take the broader economy with it.

Business investment in AI might have accounted for as much as half of the growth in gross domestic product, adjusted for inflation, in the first six months of the year. Rising AI stocks are also boosting household wealth, leading to more consumer spending, especially in recent months.