The disconnect between how people feel about the U.S. economy, and how the economy is doing, is real.
There are three trends that are driving the U.S. above the world’s rather flat trend line.
First is the Cloud, and AI. As Synergy Research noted today, there are now 1,000 hyperscaled data centers and half are in this country. Those data centers will double their capacity over the next four years. In other words, cloud investment is going where clouds already exist.
All this is being done to feed generative artificial intelligence (GenAI). Most Americans don’t understand it, and don’t see it. We think of it in terms of consumer applications like ChatGPT but that’s not where it’s most transformative. I had a broadband failure last week, and a repairman (a real person) had me back up and running the same day. That never happened before. There are huge productivity gains in handling what were once back-office functions. But it’s largely invisible.
Second are chips. In the last few weeks, the Biden Administration has pushed out about $20 billion to the largest chip fabricators – Taiwan Semiconductor, Samsung, and Intel. This is being re-invested 10-fold in new American plants. Taking back control of Moore’s Law means investment on a massive scale, and economic growth to match.
Again, you don’t see it because the plants aren’t up yet. But the money is being spent and, once it is, you’re going to see a lot more income going through American hands.
The End of Oil
Third is the energy transition, which I’ve been writing about here for 15 years. My neighborhood just got its first Amazon Rivian van. Every delivery network is going to have something like this, scaled to its operations, over the next few years. California is now fully powering its grid with renewables. There are storage breakthroughs being announced practically every day.
Renewable energy has been the cheap energy for 5 years now. (The cheapest renewable energy of all is efficiency, and that, too, is invisible.) The cost difference is now vast enough to afford the massive changes in our infrastructure needed to bring this abundance to market. It’s where the growth is and it’s only going to get better.
Again, consumers don’t see these changes. Cloud data centers are out of town. Chip plants are out of town. So are wind turbines. But they’re driving the American economy forward, faster than any other country.
It’s what I have said for decades now. Trained, empowered, and free minds are what drive economic growth in a technology age. That’s what America has in abundance. It’s what none of the world’s autocracies can offer.
It’s only going to get more obvious.
