AI Spending Props Up U.S. Economy, O'Leary Says

Kevin O'Leary argues consumer spending and artificial intelligence are sustaining growth as living costs climb.

Updated on Nov. 2, 2026 in Economic Indicators

Bold flat-color vector editorial illustration of stacked shipping containers beside a steel transmission tower and cables under a pale sky, evoking infrastructure carrying the economy. — The U.S. economy grew at a 3.4% annualized rate in the third quarter, beating forecasts, as Kevin O'Leary credits AI spending and consumers. AI Illustration. Upload story photo >

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Kevin O'Leary posted on X on Sunday that AI and consumer spending are keeping the U.S. economy resilient despite rising housing and energy costs. The U.S. economy grew at a 3.4% annualized rate in the third quarter, beating expectations of 3.2%.

Why it matters

Economist Mark Zandi warned that U.S. growth remains below potential, raising the risk of recession and persistent inflation. Palihapitiya cautioned that AI companies' heavy borrowing could compete with U.S. Treasury demand.

The U.S. economy grew 3.4% annualized in the third quarter, above the 3.2% forecast, while September PCE inflation accelerated to 3.6% and core PCE reached 3.1%. Whether this growth can hold given the Federal Reserve's steady 3.75%-4.00% rate remains unresolved.

The players

Kevin O'Leary

O'Leary is a television personality and investor known for his appearances on the show Shark Tank and his outspoken commentary on markets and politics.

Mark Zandi

Zandi is chief economist at Moody's Analytics and a widely cited forecaster on U.S. growth, recession risk and inflation.

Chamath Palihapitiya

Palihapitiya is a venture capitalist and former Facebook executive who has become a prominent commentator on technology companies and financial markets.

The details

O'Leary argued that consumer spending stayed resilient despite rising housing costs and that artificial intelligence is a key driver. Palihapitiya stated that seven or eight major AI companies had accumulated an estimated $340 billion to $400 billion in debt. O'Leary also cited diesel, jet fuel and energy costs above $100 and said two wars are ongoing.

Third quarter (2026): U.S. economy grew 3.4% annualized.
September 2026: PCE inflation accelerated to 3.6%.
Last week: Palihapitiya warned about AI company debt.
Sunday, Nov. 1, 2026: O'Leary posted his remarks on X.

Macro View

The Federal Reserve has held its target range at 3.75%-4.00%, keeping policy restrictive while third-quarter growth of 3.4% and September PCE inflation of 3.6% send mixed signals. This places the current reading within the broader debate over whether the economy can sustain above-trend growth without reigniting inflation.

Rising energy, diesel and housing costs continue to squeeze household budgets even as overall spending holds up. With inflation running at 3.6% and the Fed holding rates at 3.75%-4.00%, borrowing costs for mortgages and loans are likely to stay elevated.

The takeaway

Household budgets are being tested by high inflation and energy costs even as headline growth looks strong. Watch the next inflation and rate-decision releases to judge whether that growth can be sustained.