According to an analysis published by Epoch AI on August 24, the way semiconductors are accounted for in US GDP creates a statistical blind spot that understates the country’s economic growth by roughly 0.3 percentage points per year. The issue stems from the fact that Nvidia designs its chips in California but has them manufactured in Taiwan by TSMC: when servers containing these chips are imported back into the United States, the entire value is treated as a subtraction from GDP, even though Nvidia’s intellectual contribution was created domestically. The company receives no export credit for this design work, since it never physically left the country. Separate analyses from Goldman Sachs and Federal Reserve economists confirm that AI investment contributes significantly less to GDP once imports of computer hardware are accounted for.
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