Trump and Musk love to put out big numbers but the facts don’t back them up.
These
announcements invariably center on a dollar figure, usually one almost
preposterously large. Five hundred billion, two trillion, 10 trillion — we are
all supposed to marvel at the majesty of this number, to the point where our
critical faculties fail us and we accept it without skepticism.
There
may never have been a better case study of this than Trump’s recent trip to the
Middle East. During the tour, Trump repeatedly touted the enormous deals he
supposedly obtained from Saudi Arabia, Qatar, and the United Arab Emirates, but
an examination of those and some other recent deals he has announced — all
portrayed as new investments pouring into the American economy — shows them to
be largely a mirage.
We’re
the marks, and the suspiciously large dollar number is the centerpiece of the
con.
So many
deals you’ll be tired of all the deals
Trump returned from the trip claiming to have obtained “over $2 trillion in great deals,” which would indeed be remarkable. Since our entire GDP last year was around $30 trillion, that alone would mean an increase of almost 7 percent in the size of our economy; the last time we had that much growth in a single year was in 1984.
Alas, the $2 trillion figure is essentially fictional. First, as the Washington Post noted, many of the deals the Trump administration has been claiming credit for from this trip were actually inked under the Biden administration, and some are absurdly exaggerated to boot. In one case, the administration claimed an agreement for Amazon to provide $1 billion worth of cloud services to the UAE was actually a $181 billion deal.
And
according to one source who spoke to the Post, the Saudi government contacted
“all the top businessmen” in the country and asked how much business they have
in the United States, so it could add up the numbers and present them to Trump
for him to announce as though they represented new investments.
As for
the investments from the Gulf governments, “these sovereign wealth investment
funds already have a substantial investment portfolio in the United States,”
Adam Hersh, senior economist at the Economic Policy Institute, told Public
Notice. “So a lot of what’s being announced is probably stuff that they already
are doing or were going to do anyway.”
Many of
the figures were provided with few details, and even if they do materialize, it
would have to be over the course of years or even decades.
Consider the money supposedly pouring in from Qatar. Somewhat confusingly, the administration says Trump “signed an agreement with Qatar to generate an economic exchange worth at least $1.2 trillion. President Trump also announced economic deals totaling more than $243.5 billion between the United States and Qatar.” So is it $1.2 trillion or $243.5 billion? It’s impossible to tell.
There is
one more specific component, but it might best be called aspirational. Qatar
Airways says it will be buying “up to” 210
aircraft from Boeing, which sounds terrific. But Boeing produced only 348 jetliners for all
its global customers in 2024, and Qatar Airways’ entire current
fleet consists of 233 planes. If the carrier is going to nearly
double the size of its fleet, it would take an awfully long time — likely
decades. It’s certainly not a bad thing for the American economy if this huge
order comes to pass, but that’s a big if.
Turning
to the United Arab Emirates, we see that in reaching its fantastical dollar
totals there, the administration is counting an announcement it made in March that the
UAE would invest $1.4 trillion “in the United States.” But it’s not clear how
the administration calculated that figure, and what numbers they do provide are
fuzzy at best.
The
largest specific amount, $100 billion, is attributed to the AI Infrastructure Partnership, a
collaboration of a group of investment firms and technology companies including
BlackRock and Microsoft, to finance artificial intelligence projects. MGX, an
investment company owned by the government of Abu Dhabi, is one of the
investors.
But $100
billion is the total that project is hoping to “mobilize” and
spend around the world, not in the US. Furthermore, how much MGX plans to
contribute is not detailed, and it is likely just a fraction. Nevertheless, the
administration calls the entire $100 billion a UAE “investment” in the United
States, which is clearly misleading if not outright false. The rest of the
investments the administration cites — $25 billion here, $1.2 billion
there — don’t add up to anything near the flashy $1.4 trillion total.
There is
one MGX investment we know more about, but it’s more like a payoff to the Trump
family than an “investment.” MGX is purchasing $2 billion worth of stablecoins
issued by World Liberty Financial, the crypto firm recently created by the
Trump family and its sketchy partners.
That
arrangement will net the Trumps something on the order of $80 million a year
(in actual money, not crypto), according to Forbes.
This
raises another issue: Trump might argue that lying about the details doesn’t
matter as long as he’s bringing business to the United States. But as Hersh
told me, “There’s a difference between promoting the United States as a
favorable investment environment and cutting these deals where the president is
benefiting personally from the deal, whether it’s financially or to tailor this
to his political benefit.” And with Trump, we know what takes precedence.
We’ve
seen this movie before
Trump
has put on versions of this show many times, and the same pattern always
recurs: He makes a splashy announcement which receives credulous coverage, then
most reporters move on and don’t follow up to see whether the dramatic dollar
figure he announced actually panned out.
The
structure of news helps explain why: An announcement is a discrete event that
occurs on a particular day and is straightforward to cover, while unfulfilled
promises occur over time and require enterprising journalism to report on.
Trump understands this perfectly well, and he also knows how seductive a big
number can be. This is the man who says his buildings have more floors
than they actually do and claimed his 11,000-square-foot
apartment was 30,000 square feet.
Case in
point: One day after taking office, Trump held a dramatic White House press
conference to announce the creation of “Stargate,” a large data center project
to power AI. In attendance were Larry Ellison from Oracle, Sam Altman from
OpenAI, and Masayoshi Son of SoftBank, the Japanese investment firm.
“Put
that name down in your books because I think you're going to hear a lot about
it in the future,” Trump said, “a new American company that will
invest $500 billion at least in AI infrastructure in the United States and
very, very quickly, moving very rapidly, creating over 100,000 American jobs
almost immediately.”
The $500
billion figure was highly questionable, and the idea of immediately creating
100,000 jobs was bonkers.
Yet in
the coverage of the Stargate announcement, the $500 billion figure was in all
the headlines: “Trump announces a $500 billion AI infrastructure investment in
the US” (CNN); “Trump highlights partnership
investing $500 billion in AI” (AP); “Trump tech agenda begins with $500B
private AI plan and cuts to regulation” (Washington Post).
But the
figure is imaginary. OpenAI and SoftBank have pledged to spend just $19 billion each
on Stargate, which neither company appears to have lying
around at the moment, so even that will still have to be mostly raised or
borrowed. As for the rest of the $500 billion, it’s almost purely hypothetical:
The project might cost that much, from now until some point in
the future, but who knows.
The same
is true of Trump’s fantastical 100,000 jobs created “almost immediately.” There
is only one Stargate location under construction, in Texas. Data centers create
a fair number of jobs during the building phase — in April there were around 2,000 workers
erecting the project — but once the center is operational, that number drops
precipitously. The Stargate facility will reportedly employ only about 100
people long term.
But both
Trump and the Stargate participants had an interest in exaggerating the project
beyond all reason: He got to claim that he is bringing limitless prosperity to
America, and they fed the AI hype that boosts their businesses.
And
companies know that a good way to gain Trump’s favor — or perhaps more
importantly, avoid his wrath — is to give him credit for what they were
planning to do anyway even before he got elected. Apple has played this game
with particular skill. In November 2019, Trump visited an Apple computer plant
in Texas, then tweeted, “Today I opened a major Apple
Manufacturing plant in Texas that will bring high paying jobs back to America.”
But the plant had already been in operation for six
years, since early in Barack Obama’s second term.
Then,
this February, the company announced that it would spend $500 billion in the
United States over the next four years. Much of the coverage portrayed the announcement as
a significant shift in response to Trump’s tariffs. Yet when the Wall Street
Journal examined the company’s publicly
released balance sheets, it concluded that “Apple’s announced figure is in line
with what one might expect the company to be spending anyway, given its
financials.”
The
number is the tell
As the
most prodigious liar in the history of politics, Trump deploys many different
kinds of falsehood and puffery (ask him about “the most beautiful piece
of chocolate cake that you’ve ever
seen”), most of which we’ve gotten used to. But Trump’s use of specific dollar
figures is troubling precisely because its specificity is meant to communicate
something real and concrete. It attracts reporters who repeat the figures
without taking the time to look too closely, thereby making them the conduit
for Trump’s deception.
It’s
fitting that so many of the recent iterations of this technique revolve around
artificial intelligence. At the end of Joe Biden’s time in office, his
administration put restrictions on the export of
computer chips meant for AI systems, banning them entirely to adversaries such
as Iran and China and capping exports to all but 18 close American allies. The
deals with Gulf countries would effectively remove those limits, and in addition
to military hardware and Trump’s good will, that’s what they want most of
all: access to the hundreds of thousands of
chips needed to run AI at a large scale.
AI is a
perfect vehicle for this brand of chicanery because so much of it is built on
hype: absurdly optimistic predictions about the future, mind-boggling numbers
that its boosters discourage us from interrogating too closely, and assurances
that beneficial economic transformation is upon us, far sooner than any
reasonable person believes. Trump may not be able to tell you what AI is, but
he knows like-minded hype artists when he sees them.
And when
they all get together — whether it’s American tech barons looking to raise
billions, or Gulf sheiks eager to get their hands on computer chips — we should
start from the assumption that when Trump throws out a mind-boggling dollar
figure that will supposedly be spent in the American economy, it’s just smoke
and mirrors.
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