Greg Ip

Hyperscaler capex on track to exceed national defense spending.* AI is no longer just a tailwind, it's hurricane-strength weather system distorting everything in the economy. AI is pumping up stocks, profits, and depressing workers and wages. My column: wsj.com/tech/ai/ai-is-…

I spent some time diving into the pickup in the jobs numbers over the past six months, link in next. Includes a funny irony about a specific marker the Trump team set to accomplish in the labor market at the beginning of 2025, and where they ended up after all the carnage. 1/2

Appreciate @greg_ip citing my analysis of AI contributions to GDP growth. And I agree with him: if growth in AI-related capex were to slow, it would be a headwind for sure but not an economic catastrophe. We might go from 2% real GDP growth to something closer to 1.5-1.75%.

2nd, @mtkonczal notes Trump officials like Miran & Bessent argued 73% of jobs created under Biden were gov't and gov't adjacent like health and education. Yet in first 10 mos of their admin, 255% of net job creation came from same sectors. The share has since dropped to...73%.

Great post from @mtkonczal. 1st, immigration: he finds 20% sub-industries with largest non-citizen % have led job gains since November. Supports my thesis a pickup in immigration could explain faster payroll vs household job growth (& higher breakeven)

Greg does great work, the $ for AI Capex is astounding.

On the April 30, 2026 episode of “Shooting the Bull” with @drowsyinvestor and @investing_bear I said that I’m feeling more uncertainty than at any time since the GFC. More than one person has asked me to list the reasons why. Here are some of them… (1) Ai is, by far, creating the most uncertainty for me. I don’t know what impact it will have on business obsolescence, new business formation, wages, jobs, and employment levels, productivity, GDP growth, truth, and the safety of humanity, etc. Also, the speed of technological advancement inside the Ai ecosystem is hard for me to quantify and value. I also don’t know “what inning we are in” for the Ai buildout or broader reindustrialization. At this point, I’m far more optimistic than pessimistic, and think we are early innings, but my mind could possibly change quickly. As @greg_ip wrote on May 7 in the WSJ, “AI’s pervasive presence makes it almost impossible to discern what is actually going on.” (2) The conflict in Iran, the closure of the Strait of Hormuz, high oil prices, and the effect high oil prices for longer could have on inflation and the potential for stagflation or even a recession. (3) A new Fed Chairman that has said he wants “regime change” at the Fed. (4) Cold “tech” war with China. (5) New massive companies about to IPO and what that does to Mag7 weightings in the S&P 500, if anything. This is not a complete list, but I think long enough to explain my feeling of uncertainty.

@JeffHorwich @MinneapolisFed fascinating, thanks!

@greg_ip Per today's AI-economy-distortions piece in print, new @MinneapolisFed research nailing down just how much trade is dominated by AI, bringing in the full range of related imports & exports. Rise in imports almost entirely AI. Mexico a surprise. minneapolisfed.org/article/2026/m…

@GiladEdelman @ernietedeschi Second, a ton of the AI-linked profit and wealth has flowed towards a small share of companies and shareholders, the latter of whom probably didn't amp up spending THAT much as a result. So if the boom goes away, the median household won't be much affected.

@GiladEdelman 2 points on this. First, by some measures, ex-AI the economy is barely growing. But once you adjust for imports the way @ernietedeschi has, the AI contribution is not quite so big. Without it, you lose maybe 1/3 of a point of growth...

Hyperscaler capex on track to exceed national defense spending.* AI is no longer just a tailwind, it's hurricane-strength weather system distorting everything in the economy. AI is pumping up stocks, profits, and depressing workers and wages. My column: wsj.com/tech/ai/ai-is-…

*National defense spending in the CBO baseline. White House wants much more.

@conorsen @EricFinnigan It might work through several channels. Undocumented still here more willing to go out and work. That should show up in CPS and CES. Also: fewer departures (deportation or voluntary) and perhaps more entries. That would show up in CES, but not CPS.

@EricFinnigan @greg_ip So ICE raids directionally down leads to more movement/activity among undocumented immigrants already here?

April's jobs report not at all consistent with the idea that breakeven job growth has plummeted to around zero. We got 115,000 new payroll jobs, and the unemployment rate went UP, from 4.26% to 4.34%.

From “learn to code” to “learn to care”

@conorsen Just a hunch

@greg_ip Do we have any data on that, or just a hunch?

@conorsen x.com/greg_ip/status…

@greg_ip Household vs establishment survey…

3/ One theory: net immigration has picked up since Minneapolis. Household data are benchmarked to the January population estimates, so if net migration has risen, payroll survey may pick it up while household survey won't.

2/ With that kind of job growth unemployment rate should have gone down if breakeven was ~ zero. Household survey is consistent with the story: employment down 226,000, and labor force down 92,000. Still: adjusted to payroll concept household employment was up 118,000.

That the unemployment rate edged higher and wages were soft is what matters for the Fed. Obviously, the Fed is on hold but this is somewhat counter to the concerns of some of the hawks. There may be more labor slack than generally believed.

@JessicaBRiedl Lincoln, JFK and you have so influenced the overall corpus of text that AI assumes the original was based on AI rather than vice versa. Like the apocryphal English undergrad who dismissed Shakespeare as a bunch of recycled platitudes.

Abraham Lincoln, Gettysburg Address, 1863:

Just for fun, I plugged a recent article of mine into an online AI detector. It claimed my article was 88% AI-generated. This was odd (I write my own articles!), so I plugged in my first think tank report from way back in 2001. It was scored 94% AI-generated. ¯\_(ツ)_/¯