Massive investments in AI are making the US economy look like a nepo baby who couldn’t afford their SoHo loft without regular cash transfers from their parents. Experts analyzing recent government data say that tech giants splurging on AI data centers packed with the latest computer chips are propping up an otherwise sluggish economy.

AI investments accounted for 1.3% of the 3% the GDP grew last quarter, according to number crunching by economist Paul Kedrosky.

AI is the economy’s steroid

Kedrosky estimates that AI spending already makes up a larger share of GDP than spending on telecom and internet infrastructure did during the dot-com bubble in 2000.

• Meta, Alphabet, Microsoft, and Amazon collectively spent $69 billion on AI infrastructure last quarter, according to Kedrosky. They plan to shell out up to $320 billion for AI tech and data centers this year, up from $230 billion last year, per CNBC.
• Meanwhile, consumer spending, the typical engine of the economy, has weakened. AI spending contributed more to GDP growth than consumer spending did last quarter, according to the head of economic research at Renaissance Macro Research, Neil Dutta.

The AI spending boom has been a boon to chipmakers like Nvidia and AMD, which have seen their valuations skyrocket. It’s also benefited the utility companies capitalizing on growing power demand and land purveyors in data center hubs like Northern Virginia.

Could this be a bubble?

While Wall Street seems bullish that Big Tech’s bet on AI is justified—especially with a recent rise in AI services and cloud revenues—some economists are worried that the boom could end in a bust.

If AI doesn’t deliver the productivity gains its biggest boosters are hoping for, the Great Data Center Buildout could be a repeat of the early 20th-century railroad boom or the dot-com bubble, when tech optimists overestimated demand.

But…some experts say that the effect of the AI spending frenzy on the US economy might be overstated since much AI-powering semiconductor production happens overseas.—SK

Trump and Putin to meet in Alaska on Friday to talk Ukraine ceasefire. President Trump announced the meeting yesterday amid the approach of the deadline he had set for Russia’s Vladimir Putin to end his country’s invasion of Ukraine or face the imposition of steep “secondary tariffs” on its trading partners. The announcement came as Bloomberg reported that the US and Russia were working to hammer out an agreement that would stop the war but would allow Russia to keep territory it seized in the invasion. However, Ukraine’s President Volodymyr Zelensky appears to have already rejected the idea, saying in a video address early this morning, “Ukrainians will not give their land to the occupier,” per the New York Times.

The IRS head is out. Being in charge of the nation’s tax agency doesn’t come with a lot of job security these days: Yesterday, President Trump removed former Rep. Billy Long from the Internal Revenue Service’s top post less than two months after he took it up (his term was set to expire in 2027). Treasury Sec. Scott Bessent will replace Long—who was the sixth IRS commissioner this year—on an interim basis. The shakeup comes after the IRS had shed staff amid Trump’s government worker layoffs and the recently passed legislation Trump supported that made big changes to the tax code. Long said on X that Trump would be appointing him as ambassador to Iceland.

Trump wants a $1b settlement from UCLA. The university is looking for a deal after the Trump administration accused it of civil rights violations related to antisemitism and affirmative action, and both sides told news outlets that the president is seeking $1 billion from the school—a figure UCLA’s president strongly opposed. It’s the first public university to face a funding freeze over such allegations, and the amount sought far exceeds the $221 million deal the administration made with Columbia and the $50 million deal it made with Brown. Meanwhile, the fight between President Trump and Harvard continues to escalate (despite the university reportedly being willing to spend $500 million on a settlement), with Trump threatening to take over Harvard’s patents, per the WSJ.—AR

Arguments of “Snapchat did it first” are the least of Meta’s PR problems right now. Users are bashing Instagram’s new map update over privacy concerns. Some are alleging that their location got shared without their permission, despite the company’s insistence that the new feature is opt-in only.

The Snap Maps-like feature lets you share your location, plus geotagged post locations, with some or all of your followers. Instagram’s top exec, Adam Mosseri, spent the week on damage control after users claimed they saw themselves on Instagram Map even though they never turned the feature on:

• “So far it looks mostly like people are confused and assume that, because they can see themselves on the map when they open, other people can see them too,” Mosseri said in one reply. He also claimed that users may have been mistaking their location-tagged posts for their live locations.
• Many Instagram users say otherwise. “No one is confused. My friends were screenshotting my location and sending it to me while we were scrambling trying to remove it,” Threads user @simplyy.eden replied to Mosseri.

Either way, this update backfired: A post on X urging people to turn off their location on the Instagram app (here’s how) has more than 46 million views. A Washington Post column also recommended severing Instagram’s access to your location altogether via your phone’s settings.—ML

It’s a volatile time to be a Bond villain, a Costco member, or anyone else who stashes their wealth in gold bars:

• The price of US gold futures spiked to a record high of $3,534.10 yesterday after the Financial Times reported that customs officials had declared that the newly imposed 39% tariff on goods from Switzerland would apply to one-kilo and 100-ounce gold bars—taking traders by surprise because these items had previously been exempted from import duties.
• The price dropped, however, after the White House said it would issue an executive order to clarify what it called misinformation about gold.

While the import tax on gold bars may sound like it only matters to Real Housewives and the very paranoid, one reason it’s been historically exempt is because of the important role the metal plays in the financial system as both an asset and a global currency that’s frequently shipped around the world. The tariff’s impact would reshape the metal trade because Switzerland is responsible for about 70% of the gold market, per The Guardian.—AR