The "Artificial Intelligence craze" is driving US stocks to record highs but weighing heavily on GDP.

The Artificial Intelligence (AI) craze is driving the US stock market to new record highs, but over-reliance on imported technology is widening the country's trade deficit.

This inadvertently becomes a drag on the real Gross Domestic Product (GDP) growth of the world's leading economy .

Analysis from the United Nations Conference on Trade and Development (UNCTAD) shows that about three-quarters of the increase in US imports of goods comes from hardware related to Artificial Intelligence, such as servers and high-performance computing equipment.

Meanwhile, research published by the Federal Reserve Bank of Minneapolis estimates that up to 70% of the investment in Artificial Intelligence manufacturing in the US is paid for imported goods.

This fact pushed the US trade deficit in August 2026 to $105.6 billion – the highest level in 17 months – as imports surged 4.3% to a record $420.8 billion. The US trade deficit-to-GDP ratio also increased from 2.7% in the first quarter of 2026 to 3.0% in the second quarter of 2026.

Economist Dean Maki from Point72 Investment Fund predicts that this deficit is structural and could expand to 4% of GDP next year due to escalating demand for computers, semiconductor chips, and telecommunications equipment for Artificial Intelligence.

The surge in technology imports explains why the US's real year-on-year GDP growth in the second quarter of 2026 was only slightly above 2%, despite business equipment investment accelerating by more than 16%—the fastest rate in five years.

The large trade deficit significantly reduces the net contribution of trade to GDP, keeping economic growth modest despite a surge in private investment.

Conversely, the wave of AI investment from the US is bringing huge profits to Asian technology corporations. Chipmaker TSMC recorded record revenue of $46.7 billion in the third quarter of 2026, while Samsung Group is expected to achieve quarterly profits of up to $80 billion.

Brad Setser, an expert from the Council on Foreign Relations (CFR), estimates that the combined trade surplus of South Korea and Taiwan (China) reached $800 billion in September 2026. If this trend continues, the two countries will achieve a combined current account surplus of $1 trillion next year.

This situation presents a major political challenge for President Donald Trump's administration. While the White House may claim that the surge in AI investment is driving the stock market to unprecedented highs, the continuously record-breaking trade deficit and soaring surpluses with foreign partners demonstrate that the broad-based tariff policies of the United States have not yet effectively narrowed the trade gap as intended.

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