If you exclude AI-driven investments, then the US economy mirrors Germany’s near-stagnation, with near zero GDP growth in the first half of 2025. More than 90% of US GDP growth stems from AI and related sectors. Large parts of >$375B AI investments scream “bubble”. Only a smaller percentage of companies and labs have a unique MOAT. Should it burst, due to whatever reason, the US will face a strong recession.
The AI bubble could burst from two opposite extremes: exponential technological progress or the lack thereof. In case of exponential technological progress; imagine post-LLM architectures slashing compute needs by 100x (i.e., Mamba). This will strand GPU-heavy datacenters. It will make >$2.9T of mostly debt-financed datacenter investments obsolete. On the other side: If LLMs plateau without ROI, the hype will fade like dot-com, tanking valuations despite tangible capex.
Whatever the case, if it pops, the US could spiral into a vicious reinforcing cycle: recession → layoffs/unemployment → consumer pullback → deflationary spiral (or stagflation if supply shocks hit) → political extremism. This reminds me of pre-WW2 Europe. The US must diversify growth beyond AI now.
What can Germany learn from this? The obvious is to accelerate AI adoption and sovereignty. Just as the US without AI stagnates, Germany with AI could grow again. At the same time, imitating the US is a fragile lifeline. Perhaps the smartest idea is to reject the hype cycle altogether. Let Berlin based AI startups do their thing, rent US based AI software, and focus all energy on high-tech breakthroughs in the decentralized Mittelstand.
