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As AI expands, Americans have doubts

25 min episode · 2 min read

Episode

25 min

Read time

2 min

Topics

Productivity, Investing, Marketing

AI-Generated Summary

Key Takeaways

  • Gold Market Shift: Gold now slightly outvalues treasury bonds in central bank holdings, with US dollar assets dropping below 50% of total reserves while gold reaches 28%. This momentum rally reflects investor anxiety over tariffs, geopolitical tensions, and rising government debt, with central banks diversifying into euros and yen while buying gold as sanction-proof assets.
  • AI Economic Impact: Artificial intelligence contributed 0.9 percentage points to GDP growth in the first three quarters of 2024 across software, equipment, R&D, and data centers. In a $31 trillion economy, this represents substantial economic value. However, Pew Research data shows Americans remain more concerned than excited about AI adoption despite its rapid integration into business operations.
  • Data Center Power Consumption: Data centers used 4% of all US electricity in 2024, with projections showing 133% growth to nearly 10% by 2030. Wholesale electricity prices have more than doubled in some regions due to increasing demand. One-third of data center energy goes to cooling systems, with facilities requiring enough power to run thousands of homes per building.
  • Durable Goods Orders Signal: November durable goods orders increased 5% overall, with 0.5% growth excluding transportation, driven by AI-related spending on data centers and computers. Factory owners are upgrading aging equipment due to generous tax deductions under new legislation. Economists identify business investment momentum despite ongoing tariff uncertainty creating headwinds for equipment purchases.
  • Colocation Data Centers: Purpose-built colocation facilities like CoreSite provide shared infrastructure for multiple tenants including banks, hospitals, and social media platforms, offering superior energy efficiency compared to individual enterprise data centers. These facilities maintain cold aisles at 75 degrees and require liquid cooling solutions for higher density AI computing, serving local user populations rather than remote hyperscale training operations.

What It Covers

Gold futures surpass $5,000 per ounce as central banks shift holdings away from dollar assets. Americans express significant concerns about AI expansion despite its contribution of nearly one percentage point to GDP. Data center infrastructure demands surge, consuming 4% of US power in 2024, projected to reach 10% by 2030.

Key Questions Answered

  • Gold Market Shift: Gold now slightly outvalues treasury bonds in central bank holdings, with US dollar assets dropping below 50% of total reserves while gold reaches 28%. This momentum rally reflects investor anxiety over tariffs, geopolitical tensions, and rising government debt, with central banks diversifying into euros and yen while buying gold as sanction-proof assets.
  • AI Economic Impact: Artificial intelligence contributed 0.9 percentage points to GDP growth in the first three quarters of 2024 across software, equipment, R&D, and data centers. In a $31 trillion economy, this represents substantial economic value. However, Pew Research data shows Americans remain more concerned than excited about AI adoption despite its rapid integration into business operations.
  • Data Center Power Consumption: Data centers used 4% of all US electricity in 2024, with projections showing 133% growth to nearly 10% by 2030. Wholesale electricity prices have more than doubled in some regions due to increasing demand. One-third of data center energy goes to cooling systems, with facilities requiring enough power to run thousands of homes per building.
  • Durable Goods Orders Signal: November durable goods orders increased 5% overall, with 0.5% growth excluding transportation, driven by AI-related spending on data centers and computers. Factory owners are upgrading aging equipment due to generous tax deductions under new legislation. Economists identify business investment momentum despite ongoing tariff uncertainty creating headwinds for equipment purchases.
  • Colocation Data Centers: Purpose-built colocation facilities like CoreSite provide shared infrastructure for multiple tenants including banks, hospitals, and social media platforms, offering superior energy efficiency compared to individual enterprise data centers. These facilities maintain cold aisles at 75 degrees and require liquid cooling solutions for higher density AI computing, serving local user populations rather than remote hyperscale training operations.

Notable Moment

A California State University professor discovers her public employee pension is heavily invested in AI infrastructure through index funds, individual stocks, and real estate trusts tied to data centers. She expresses distress at being part of a system affecting lives without her input, while simultaneously depending on its success for her retirement security.

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Episode Transcript

Paying extra for tire care is BS. You know, bad service. So at Midas, we're rolling out our BS free tire guarantee. Included with paid installation and tax on every purchase, you'll pay nothing for flat replacements, nada for flat repairs, and zilch for tire rotations every 5,000 miles. That's $0 for all that. So with this limited lifetime tire guarantee, you'll pay a whole lot of nothing compared to what the other guys charge for tire care. That's the BS free tire guarantee, only at Midas. This podcast is supported by Odoo. Some say Odoo business management software is like fertilizer for businesses because the simple efficient software promotes growth. Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable. And some describe Odoo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite. So Odoo is fertilizer, magic beanstalk building blocks for business. Odoo, exactly what businesses need. Sign up at odoo.com. That's odoo.com. On the program today, macroeconomics in two flavors, gold and AI. From American Public Media, this is Marketplace. In Los Angeles, I'm Kai Rizzo. It is Monday. Today, this one is the January 26. Good as it always is to have you along, everybody. We are gonna begin today with a story that's not really about the story that you think is going to be the story. I know, but stick with me. I'll go slow. Gold has been, and there's really no other word for it, simply soaring. Futures topped $5,000 an ounce over the weekend, first time that has ever happened. And 5,000 and change per troy ounce is almost twice what gold was just a year ago. And that's been happening, and here's the twist. As it's been happening, gold has started to displace dollar denominated assets in the holdings of central banks around the world. Reuters reports gold now slightly outvalues treasury bonds in those holdings, and data from the IMF shows US dollar assets now account for less than half of those holdings in absolute terms even as gold has risen sharply to make up around 28% of those holdings. That is exactly what you might expect to see happen if the US dollar were losing its appeal as a safe haven go to marketplace in Mitchell Hartman gets us going. Gold has been edging ever higher partly because investor stress has, says Sameer Samana at the Wells Fargo Investment Institute. There's just a very high level of angst about all the things that are going on in the world. Tariffs and trade wars, geopolitical tensions in oil producing regions, rising government debt across everywhere. I think a lot of investors are looking for a port in the storm, an investment that's outside financial assets, right, which tend to be things like stocks and bonds. Gold is one of the things they see as being money good. Foreign central banks have been buying up gold too. That's …

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  • by Pew Research Center

    Pew Research data shows Americans remain more concerned than excited about AI adoption despite its rapid integration into business operations.

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  • Purpose-built colocation facilities like CoreSite provide shared infrastructure for multiple tenants including banks, hospitals, and social media platforms, offering superior energy efficiency compared to individual enterprise data centers.

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