The US Economy Is Putting All Its Chips Down On AI

• The U.S. economy has grown increasingly concentrated in AI, with the biggest tech companies now making up about a third of the value of the entire stock market.
  

• Companies are investing in AI at a titanic scale, building colossal data centers all over the country to the tune of $400 billion in 2025.
  

• As the U.S. economy becomes increasingly concentrated in AI, more economists have warned of catastrophic consequences if it doesn’t pan out at the market crashes.
  

When Nvidia became the world’s first $5 trillion company this week, the milestone underscored how much AI has come to dominate the economy. The chipmaker, along with six other big tech companies, now makes up nearly a third of the entire stock market.

Nvidia’s market cap is 7% of all 3,265 publicly traded U.S. companies tracked by marketcap.com. When you add Nvidia to the other top six companies by market cap—Apple, Microsoft, Alphabet, Amazon, Broadcom, and Meta, all of which are heavily involved in AI—they make up 32% of the total value of the stock market. Nvidia’s value has surged because it manufactures chips that power the AI expansion.

The statistic highlights how heavily the future of the U.S. economy is now invested in the success of AI technology. While the stock market is not exactly the same thing as the economy, the high concentration of investment in AI is evident in other figures as well.

Companies are pouring money into AI on a massive scale: Silicon Valley plans to invest $400 billion in the technology this year, according to The Wall Street Journal. In the first half of 2025, investment in computer equipment accounted for 92% of the GDP’s growth, according to an analysis by Harvard economics professor and former Obama economic advisor Jason Furman.

The stock market’s heavy concentration in AI could pay off for investors if the technology lives up to its promise, but risks wrecking the economy if it does not.

AI developers say the technology promises to spur a world-altering surge of productivity and wealth. However, as more and more eggs are added to the basket of the AI ecosystem, concerns about a potential bubble have grown louder.

With so many bets concentrated in such a narrow field, more economists are speculating about the potential damage to the broader economy if the technology fails to live up to the hype and the market collapses. Those worries have intensified as AI companies become increasingly entangled in complex, circular multibillion-dollar deals with one another.

To be sure, many experts don’t see AI as a dotcom-like bubble. Federal Reserve Chair Jerome Powell dismissed the comparison this week when speaking with reporters at a press conference, saying that today’s AI darlings are much more solid business propositions than their dotcom forerunners.

“This is different in the sense that these companies that are so highly valued actually have earnings and stuff like that,” Powell said.

Still, if Powell and others are wrong, a market crash on the scale of the dotcom bubble collapse could be far more devastating in today’s economy than it was a quarter-century ago.

A dotcom-like flameout would wipe out $20 trillion of wealth for American households, Gita Gopinath, former chief economist at the International Monetary Fund, wrote in The Economist this month. And with trade wars fueling uncertainty and the U.S. government burdened by a mountain of debt, the economy may be less able to bounce back than it was at the turn of the millennium.

“A market crash today is unlikely to result in the brief and relatively benign economic downturn that followed the dotcom bust,” Gopinath wrote. “We should prepare for more severe global consequences.”

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