A surprisingly good GDP report was released Tuesday, showing the economy grew at an annual rate of 4.3% in the third quarter — the highest reading in two years.
It was surprising because many economists expected that ongoing uncertainty, particularly around President Donald Trump’s trade policies, would have some effect on the economy.
And though the growth was driven partly by rising consumer spending, that spending has been concentrated among higher income households.
The growth was also boosted by continued spending and investment on AI, an industry that has gotten a pass on some of those tariffs.
Big Tech companies have spent roughly $400 billion to build AI data centers in 2025. These giant facilities are sprouting up across the country to train and run AI models, and they require a lot of components, said Philip Luck at the Center for Strategic and International Studies.
“Steel, aluminum, copper,” he said. “All the cooling and electricity.”
Many of those construction materials are imported and subject to tariffs. Then there’s what’s inside.
“You get this big building, but in reality, it’s the little chips that are so expensive, those … alone are about 45% of the value of any data center,” Luck said.
Those graphics processing units that have sent Nvidia’s valuation into the stratosphere are the single biggest line item for data centers.
Chris Miller, a history professor at Tufts University and author of “Chip War” said though they’re designed in the U.S., they’re pretty much all fabricated abroad.
“Largely Taiwan, and Korea, which manufactures most of the memory chips inside of data centers today,” he said.
Those have been exempt from tariffs, for now. A 25% tariff on chips from China has been delayed to 2027 and the Commerce Department is investigating national security concerns around semiconductors that could still result in tariffs.
“It’s clear the president wants to impose tariffs. He’s repeatedly promised to do so, but the administration is trying to weigh the desire for tariffs with the cost that it would impose on some of America’s biggest technology companies,” Miller said.
Tariffs have already cost Big Tech an estimated $5 billion this year, said Dan Ives, head of tech research at Wedbush Securities.
“Around the edges it could hurt some spend. But the reality is, like we’re gonna have trillions being spent over the next few years,” he said.
Ives said even billions in tariffs likely won’t stop those trillions in investments in AI data centers.
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