AI Dominates Economy and Markets with Torsten Slok | The Real Eisman Playbook Ep 68

**Steve Eisman** (0:00)
Hi, Steve Eisman here. On my weekly wrap, I try to both teach and convey information as objectively as possible. But in today's media, on any important story, if I read about it in a newspaper with a leftist slant, I'll get one depiction of the story. But if I read about it from a more conservative publication, I'll get a very different take. What's the news and what's opinion is increasingly hard to differentiate. That's why when I look into news events, I first go to ground news. Ground news is my solution for getting to the facts of important stories, but also to see how left, right and center are seeking to convey the same exact story. Take for example, the headline, Trump Treasury Secretary Calls for Single Stock Trading Ban in Congress. To understand the story, I went to groundnews.com and clicked on that particular story headline. There, I immediately saw four tabs, left, center, right and bias comparison. When I clicked on the center tab, a series of headlines appeared all from center leaning sources. I could then click on any of those headlines and read the story at the source. The same happened when I clicked on the left tab and on the right tab. The bias comparison tab showed groundnews own analysis of how all three political leanings convey the same exact story. I find the groundnews system enormously helpful because it allows me to easily separate the facts from opinions. I use groundnews and I recommend you try it out. Go to groundnews.com/real to get 40 percent off their unlimited access vantage subscription. That's groundnews.com/real, groundnews.com/real. And if you don't mind, use this link to get the discount so they know I sent you.

**SPEAKER_2** (1:35)
The FIFA World Cup is here and you can now feel the thrill of the pitch in FIFA World Cup Launch Edition on Netflix. A fast and fluid football game where your phone is the controller and the TV is the stadium. Play for your country in 16 different stadiums with up to four friends, all included in your membership. Scroll to the games tab on your TV and play FIFA World Cup Launch Edition now only on Netflix.

**Steve Eisman** (2:06)
Hey, this is Steve Eisman. This is another episode of The Real Eisman Playbook. There are just so many issues going on these days, cross currents, politics, war. But from an economic perspective, I think the biggest issues are the impact of AI, re-industrialization, short term, the so-called Big Beautiful Bill, unemployment, the deficit, and the overall investing environment. And these are major issues, and we've actually never had an economist on to sort of plow through all of them. So today, I've invited Torsten Slok, who is the chief economist of Apollo, an excellent economist, and we're going to go through a ton of issues. And afterwards, I'm going to come back and talk about lessons learned. See you soon.
Hi, this is Steve Eisman, and welcome to another episode of The Real Eisman Playbook. So, there's so much going on these days. AI, K-shaped economy, oil prices, the deficit. I mean, it's just hard to keep up.
So today, we have as our guest, chief economist at Apollo, Torsten Slok, who's going to help us, I hope, to go through what must be like every day, you can't believe how much information is coming. So, Torsten, welcome, first of all.

**Torsten Slok** (3:33)
Thank you, Steve. Thanks for having me.

**Steve Eisman** (3:34)
So, let's start with a simple topic. Give us your very broad overview about the health of the US economy. A simple question, and then we'll dig deep.

**Torsten Slok** (3:47)
Well, thanks of all, again, first for having me. But it's really quite simple initially, what is the hit wins and tail wins to the economy at the moment, because there are three very important tail wins that are driving growth. First of all, we have an AI spending boom because of the data centers and the energy associated with the data centers. We calculate that that contributes at the moment about 1% is point to GDP growth. Normally GDP growth is at 2, and now 1% is coming from the AI spending boom alone.

**Steve Eisman** (4:12)
So, in other words, GDP growth this year will be about 2, and 50% of it is purely from AI spending.

**Torsten Slok** (4:20)
Absolutely. So, that's both the boom coming from the data center and energy build out, but also the associated wealth effects from the stock market being high and the increase in consumption, especially for high-end consumers. So, this is a very important source of growth that's very unusual. We have not seen this source of growth for literally decades before, where we've seen one sector in such a significant way contributing. Even with housing, we didn't see a contribution that was as high as 1% is point, because this sector is just really, really significant. The second source of growth is the industrial renaissance. The industrial renaissance means politicians that want to do homeshoring or production of semiconductors. This was the Chips Act under Biden, homeshoring of pharmaceuticals, prescription drugs, and of course, importantly, also homeshoring and production of defense.