Ones and Tooze The AI Economy
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Feb 13, 2026 A deep dive into Big Tech pouring roughly $650 billion into AI and what that capital shock means for growth and local economies. Discussion of whether this investment is a short-term boom, a bubble, or a transformative shift with uneven winners. A separate look at Germany’s years of stagnation, political responses, and shifting European industrial and defense alignments.
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AI Capex Acts Like Fiscal Stimulus
- Big tech's planned AI capex (~$650B) equals roughly 2% of US GDP and acts like a private fiscal stimulus.
- The spending creates local multiplier effects via data centers, construction, and clustering of workers.
Private AI Investment Works Like A Keynesian Shock
- Private AI investment functions as an exogenous shock similar to government stimulus in Keynesian terms.
- The incremental change matters most for multiplier effects, not just the absolute level of spending.
Local Boom, Unclear Productivity Payoff
- AI capex boosts construction and energy demand for data centers but productivity gains remain uncertain in macro data.
- Markets are already pricing in future disruption, hitting firms seen as vulnerable to AI competition.
