Washington’s economy, aided by a tech sector all in on artificial intelligence, had a strong start to the year and could be on track to outperform other state economies in 2026.

Washington’s real gross domestic product, which refers to the total value of all goods and services produced within the state, rose 1.1% to almost $730 billion between the fourth quarter of 2025 and the first quarter of 2026, according to Bureau of Economic Analysis data released last week.

If the state’s GDP continues at the same pace for the rest of the year, it would grow a total of 4.5% over the entire year. For comparison, if the national GDP holds its first-quarter growth rate, it would hit an annual increase of 2.1%.

Washington’s GDP growth comes almost entirely from the state’s information sector, which includes companies that provide software, cloud computing, digital services and communication technology.

“Those are all things Washington state excels in,” said James McCafferty, co-director of Western Washington University’s Center for Economic and Business Research.

Although the information sector encapsulates many types of businesses, McCafferty and his fellow co-director Hart Hodges believe that AI spending in the tech sector is behind the jump.

The Seattle area is home to major money-spinners in the tech industry, such as Microsoft and Amazon, that are making enormous investments in AI infrastructure. Amazon and Microsoft are projected to collectively spend about $390 billion this year on AI.

But don’t get too excited — Washington is only topping the leaderboard based on the assumption its economy’s growth in the first quarter continues at the same level throughout the year.

McCafferty and Hodges think it’s a longshot. A few large expenditures, such as data center projects, can have a major influence on quarterly GDP data.

“We would love it if this would continue because that would be very good for the region, but we want to see if this was a bit of an outlier and if things come back down a bit next quarter,” Hodges said.

For instance, Washington’s economy slowed slightly in the fourth quarter of 2025 compared with the previous quarter, despite enthusiasm for AI investments.

“The right response isn’t to say, ‘Oh, we’re unbelievably amazing or terrible’ when the numbers are really high or really low,” Hodges said. “You want to think to yourself, ‘I want to pay attention to whether this holds up.’ ”

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