In the first half of 2025, trade related to artificial intelligence accounted for nearly half of all merchandise trade growth, despite representing only about 15 percent of total trade, according to the Federal Reserve. The surge in AI-related trade reorients global commerce towards the physical components essential for AI development. Much of this increase ties directly to equipment and tools for semiconductor manufacturing, underscoring a tangible industrial shift.
The promise of AI is often framed as an abstract digital revolution. However, its real-world impact manifests as a massive, physical industrial build-out. The massive, physical industrial build-out demands substantial investments in tangible assets, from specialized factories to large-scale data centers, challenging the perception of AI as a purely software-driven advancement.
The global economy now enters an era where digital innovation is inextricably linked to tangible infrastructure. Future economic leadership will hinge on physical investment and strategic supply chain control, suggesting digitally-focused laggards will face significant challenges.
