The AI boom has driven US investment in computing equipment to roughly $400 billion per year, nearly triple its 2023 level. Yet the measured impact on GDP growth has remained modest. The conventional explanation is that much of this investment is spent on imported technology goods, which are subtracted from GDP. In a new report, we show that this explanation is incomplete: GDP statistics have a blind spot around the value American firms, most notably Nvidia, create by designing AI chips that are manufactured and sold abroad. This has led to a substantial underestimation of AI’s contribution to US GDP.
We detail:
The size of the underestimation: US GDP growth over the last year has been underestimated by about 0.3 percentage points. If Nvidia’s growth continues at its current pace, this gap could widen to almost two percentage points of growth per year by 2028.
The cause of the underestimation: GDP statistics miss most of the value created by fabless chipmakers like Nvidia, whose products are designed in the US but manufactured, assembled, and sold abroad. Because no physical goods leave the US, no goods export is recorded, and because no foreign buyer pays explicitly for the IP, no IP export is recorded either.
How we know the value is missing: We reviewed every category where Nvidia’s value-add could plausibly be recorded, including goods exports, IP exports, service exports, and merchanting, and it appears in none of them. We confirmed this analysis with the Bureau of Economic Analysis.
Why this matters now: This blind spot is not new, and it applies to other factoryless manufacturers besides Nvidia. Historically, the value that slipped through was small. Nvidia’s rapid growth has changed that.
How to correct the underestimation: International guidelines updated in 2025 already call for recording factoryless manufacturers’ overseas sales as goods exports. We also outline an alternative: recording their markups as IP exports. This would depart from international standards, but it would sidestep political resistance to counting overseas production as US manufacturing. Either change could take years to implement. Until then, GDP growth will remain understated.
You can read the full report on Epoch’s website.
We thank JS Denain, Lucio Melito, Mike Waugh, Benny Kleinman, Greg Burnham, Josh You, and Elliot Stewart for their helpful feedback and support.
