A recently published White House paper draws a powerful historical parallel, suggesting that the current wave of artificial intelligence is not merely a technological advancement but a fundamental economic shift on par with the industrial revolution of the 18th and 19th centuries. The document, titled “Artificial Intelligence and the Great Divergence,” positions AI as the undeniable centerpiece of the nation’s economic strategy, arguing it has become the primary engine for future growth both domestically and globally. The paper’s core thesis pivots away from traditional economic models, asserting that massive AI-driven capital investment, rather than consumer or public spending, is now the key determinant of economic expansion. This perspective re-frames national prosperity as a direct outcome of the nation’s ability to build and leverage a new generation of intelligent infrastructure, setting the stage for a period of accelerated growth and intense international competition.
The Domestic Economic Transformation
An Investment Boom Reshaping the Economy
The report presents compelling evidence that an AI-fueled investment boom is already underway, fundamentally altering the U.S. economic landscape. This surge is most clearly demonstrated by a remarkable 1.3% increase in U.S. GDP during the first half of 2025, an uptick attributed almost entirely to AI-related capital expenditures. This growth is not being driven by a rise in consumer demand but by a massive build-out of the essential infrastructure needed to power artificial intelligence, particularly data centers. Echoing the transformative investment in the railway network that defined the industrial revolution, early 2025 saw a staggering 28% surge in spending on related equipment, buildings, and software. The scale of this movement is underscored by the finding that AI-related projects accounted for approximately a quarter of all U.S. investment during that year. This shift signals a new economic paradigm where long-term prosperity is directly linked to the development of capital-intensive, high-technology assets.
Productivity Projections and Widespread Adoption
According to the White House analysis, sustained long-term prosperity is inextricably linked to productivity gains, and artificial intelligence is presented as the essential catalyst for achieving them. The paper outlines a spectrum of projections for AI’s potential impact on GDP, ranging from conservative single-digit increases to a more optimistic 20% surge in productivity within the next decade. It also explores more radical long-term scenarios where widespread AI substitution for human labor could propel GDP growth beyond an unprecedented 45%. Evidence of AI’s rapid integration into the economic fabric is already abundant. The computing power available for training advanced models has been increasing four-fold annually since 2010, while the cost per token of AI output has plummeted, making the technology more accessible. By the close of 2025, an estimated 78% of organizations were actively using AI, a significant leap from 55% just the year before. With 40% of the American workforce now utilizing generative AI and nearly half of all businesses paying for AI subscriptions, the technology has officially transitioned from an experimental novelty into a routine and indispensable production tool.
The Global AI Race and Strategic Imperatives
Forging a New International Economic Order
The paper frames artificial intelligence not only as a domestic growth engine but as the primary catalyst for a modern “Great Divergence” in global economic prosperity. The United States currently holds a commanding lead in several key areas, including private AI investment, the development of sophisticated foundational models, and sheer compute capacity. This leadership has enabled the U.S. economy to grow at a faster pace than its primary competitors in Europe and China. While China is identified as a significant rival in the AI space, the report highlights a critical dependency: its reliance on U.S.-designed hardware for its own AI development. To maintain and extend this strategic advantage, the document advocates for a comprehensive and integrated national strategy. This approach is supported by policies such as the “One Big Beautiful Bill Act,” which creates powerful incentives for data center construction with the explicit goal of lifting national GDP growth. The strategy represents a dual-pronged approach, combining deregulation to spur domestic innovation with a proactive foreign policy aimed at securing overseas markets for American AI technologies.
The Critical Role of Energy and Infrastructure
The report concludes by acknowledging a critical and non-negotiable prerequisite for achieving and maintaining AI dominance: energy. The immense electricity consumption required by the growing fleet of data centers is rapidly becoming a central strategic concern. Projections indicate that these facilities could consume up to 12% of total U.S. domestic electricity demand by 2028, a figure that elevates energy availability and grid capacity from logistical challenges to crucial national assets. This reality places a new premium on energy infrastructure, transforming power generation and distribution into a cornerstone of technological leadership. In this new economic landscape, the nations that lead in both AI investment and adoption were the ones that would ultimately experience superior economic growth. The United States, through a combination of policy, private investment, and technological prowess, had decisively aligned its national strategy to ensure it remained the dominant force shaping this next phase of the global economy.
