AI Boom Boosts Markets but Bypasses Main Street
Massive investments in artificial intelligence (AI) have given the U.S. economy a temporary lift, but small and medium-sized enterprises are still struggling to stay afloat in the real economy. While the stock market has surged to record highs—fueled by tech titans such as NVIDIA, Microsoft, Apple, Google, Amazon, and Broadcom—retail, construction, and service sectors continue to grapple with inflation and rising tariffs, reports CNBC.
Cameron Pappas, a florist from Alabama, reflected the situation at the grassroots level, saying, “We are now watching every expense.” To keep customers, he has reduced the number of materials used in flower arrangements rather than raising prices.
According to a recent report from JPMorgan, AI-related investments contributed 1.1 percent to the United States’ overall GDP growth during the first half of 2025. However, manufacturing contracted for seven consecutive months during the same period, while construction costs increased by 4.6 percent.
Driven by surging shares of NVIDIA, Google, and Broadcom, the S&P 500 index rose by 15 percent and the Nasdaq by 20 percent. Yet, stocks of consumer-dependent companies climbed by less than 5 percent.
Experts note that while the AI-driven economy is boosting GDP on paper, much of the broader economy remains caught in a struggle for survival.
