WSJ What’s News – “The U.S. Economy Is Hooked on AI Spending”

Date: November 25, 2025
Host: Caitlin McCabe
Featured Interview: Conrad Puzier (WSJ Economics Reporter)

Episode Overview

This episode examines how the U.S. economy is increasingly reliant on artificial intelligence (AI) spending for its continued growth. Tapping into exclusive reporting and expert insights, the hosts discuss recent estimates showing AI’s oversized role in boosting both GDP and the stock market, and they outline the risks of a potential AI-driven economic downturn. The episode also covers breaking news on Ukraine peace talks and updates on the health care subsidy debate in Congress.

Key Discussion Points & Insights

1. New Phase in Ukraine Peace Talks

• [01:06–04:07]
  • Army Secretary Dan Driscoll’s surprising diplomatic engagement with Russia signals a new, more direct phase in efforts to end the Ukraine war.
  • The U.S. administration believes that “military-brokered negotiations” may appeal more to both Moscow and Kyiv.
  • Talks were sparked after the leak of former President Trump’s 28-point peace plan, considered by many as favoring Russian interests, surprising even Washington insiders and allies.
• Notable Quotes:
  • “This plan drops a lot of people in Washington. A lot of people in Ukraine and in the rest of Europe are shocked and it sparks this flurry of diplomacy and a lot of anxiety.” – Robbie Grammer (02:13)
  • On Trump’s style: “He relies on this small group of advisors. He says, bring me a big and bold plan. Let's shake things up. Let's…break up the status quo and see what happens…But it does offer a window into how Trump operates and how Trump at least assesses he can possibly finally bring an end to this war in Ukraine.” – Robbie Grammer (03:30)

2. Affordable Care Act Subsidy Debate

• [04:07–05:21]
  • House Speaker Mike Johnson warns the White House that most House Republicans are against extending enhanced ACA subsidies due to concerns about taxpayer funding abortion coverage.
  • Trump’s advisors are working on a two-year extension plan with income caps, while Democrats want a three-year extension.
  • Stakes are high: 20 million Americans could see higher costs if subsidies lapse.

3. The U.S. Economy’s AI Dependence

• [05:21–10:07]
  • AI is now a significant component of U.S. economic growth.
  • Conrad Puzier reports: “About half of GDP growth in the first half of this year is due to AI...without AI, there really isn't growth in many other parts of the economy.” (00:52 & 06:10)
    • Sectors outside AI and healthcare are largely stagnant.
    • AI’s impact helps explain strong economic growth despite high tariffs and interest rates.
  • The “wealth effect” from booming AI stocks has driven an estimated $180 billion in additional consumer spending this past year.
    • “Americans look at their brokerage account and see that their stock portfolio is up and then they feel richer and that makes them more likely to spend really on anything.” – Conrad Puzier (07:28)
    • 1% added to consumer spending has a big GDP impact as it’s two-thirds of output.
    • Two-speed economy: working class struggles while wealthier, invested Americans benefit.
  • Risks of an AI Bubble:
    • If AI stocks drop 20–30%, GDP growth could fall up to 1.5 points due to reduced consumer spending.
    • Lowered capital investment if companies can’t fund data centers/chips.
    • Economists generally don’t see systemic risk (like 2008) due to low AI debt exposure, but hazards remain.
  • Would the U.S. be in recession without AI?
    • “Some economists think so...if it weren't for the stock market boom, if it wasn't for all this investment in AI infrastructure, we would already be in a recession.” – Conrad Puzier (09:44)
    • Broad consensus: the economy is deeply dependent on AI; the outlook would be much worse without it.

Notable Quotes & Memorable Moments

• On AI’s GDP Impact:
  “About half of GDP growth in the first half of this year is due to AI, which is a pretty high share...without AI, there really isn’t growth in many other parts of the economy.”
  – Conrad Puzier (06:10)
• On Consumer Spending and Stocks:
  “Americans look at their brokerage account and see that their stock portfolio is up and then they feel richer and that makes them more likely to spend really on anything.”
  – Conrad Puzier (07:28)
• On Risks of a Bust:
  “If the stock market goes down by, I don't know, 20 or 30%, you could see a hit to GDP growth of like 1 or 1.5 percentage points...this is purely just Americans feeling poorer and spending less.”
  – Conrad Puzier (08:21)
• Would We Be in Recession Without AI?
  “Some economists think that if it weren’t for the stock market boom, if it wasn’t for all this investment in AI infrastructure, we would already be in a recession.”
  – Conrad Puzier (09:44)

Timestamps for Important Segments

• Ukraine Peace Talks/Trump Plan Coverage: 01:06 – 04:07
• Affordable Care Act Subsidy Debate: 04:07 – 05:21
• AI and Economic Growth: 05:21 – 10:07
  • Breakdown of AI’s impact: 06:10 – 07:09
  • “Wealth effect” and consumer spending: 07:09 – 08:16
  • Risks of an AI bust: 08:16 – 09:31
  • Would we be in recession without AI?: 09:31 – 10:07

Additional Brief Headlines

• Amazon’s High-End Black Friday Push: (11:01–12:30)
  • Amazon expands into cars and high-end luxury goods, reflecting e-commerce’s growing presence.
• Housing Market Insights: (12:30–13:25)
  • One in five U.S. home listings had a price cut in October—twice the pandemic rate.

Summary

This episode spotlights the profound and growing role of AI in powering the U.S. economy—potentially masking broader stagnation and heightening exposure to a tech-driven downturn. Paired with breaking geopolitical and policy news, it reveals a landscape in which technology, politics, and global events are deeply intertwined with American prosperity and stability.