AI investment boom now a key risk to US economic stability, warns Jefferies

The funding increase in synthetic intelligence has emerged as one of many essential pillars supporting US financial development over the previous few years, and a sudden collapse in AI-related funding may severely impression the nation’s development momentum, a world brokerage agency, Jefferies, stated in a report launched on Thursday.

The United Nations’ flagship World Financial State of affairs and Prospects report, launched on Wednesday, additionally highlighted how large funding within the US AI sector has surged lately. Funding in AI rose from $87 billion in 2022 to $93.1 billion in 2023 earlier than leaping to $150.6 billion in 2024.

Jefferies famous that capital expenditure, which is the spending on belongings linked to synthetic intelligence, was the most important contributor to US financial development in 2025, second solely to private consumption.

“The macro vulnerability to a sudden collapse in AI capex is evident, since that was the primary driver of US financial development final yr after private consumption,” Jefferies stated, citing nationwide accounts knowledge.

In accordance with the report, US actual GDP expanded by $438 billion, or an annualised 2.5 per cent, within the first three quarters of 2025, with a big share of this development pushed by funding in knowledge centres, semiconductor manufacturing, and associated digital infrastructure.

The brokerage cautioned that by mid-2026, buyers are prone to begin questioning the sustainability of returns from AI-related capital expenditure. It additionally flagged the chance of potential extra capability in knowledge centres which may weigh on company stability sheets and dampen future funding flows.

Comparable dangers may spill over into the US vitality sector, which rallied final yr on expectations of rising electrical energy demand pushed by knowledge centres and AI-related energy wants.

Whereas Jefferies acknowledged that AI brokers may unlock important business alternatives sooner or later, it cautioned that giant investments have already been front-loaded into the present cycle. Within the occasion of an over-investment bust, prices associated to AI “inference” may fall sharply — mirroring the dot-com period, when extra fibre-optic capability led to a collapse in broadband prices and a surge in digital commerce.

The brokerage added that the AI funding cycle is inherently extra weak to abrupt reversals as a result of AI chips have a a lot shorter technological life in contrast with fiber-optic cables. The technological lifetime of chips is round three to 4 years, whereas fiber-optic cables final almost 25 years, making AI-related funding cycles structurally extra vulnerable to sudden downturns.