AI and data centre spending is powering a growing share of US economic growth, raising the stakes if the technology-driven investment surge loses momentum.
The US economy is becoming increasingly dependent on AI investment. A slowdown in AI spending could hit markets, business investment and economic growth.
- Trump pushes AI development despite economic dependence.
- AI investments drive significant US economic growth.
- Slowdown in AI could trigger recession, stock market drop.
President Donald Trump is pushing ahead with artificial intelligence development even as concerns grow that the US economy has become increasingly dependent on the massive spending behind the technology.
The scale of that dependence is becoming clearer. According to CNN, ING estimates that investments dominated by AI and data centres account for about a third of US economic growth in 2026, while Goldman Sachs estimates AI investment is responsible for half of profit growth in the S&P 500.
That makes the future of AI more than a technology story. A sharp slowdown could affect stock markets, business investment, household wealth and overall economic growth.
Trump has continued to argue that the US must move quickly to maintain its lead over China. He has rejected calls for broad restrictions that could slow development, warning that falling behind in AI could have major economic and strategic consequences.
His position comes as some technology executives and other critics are calling for greater safeguards around increasingly powerful AI systems.
Wall Street has plenty riding on AI
The enormous flow of money into AI has helped lift technology companies and supported demand for data centres, computer equipment, chips and electricity.
It has also contributed to rising stock valuations. For investors, the expectation is that AI will eventually deliver large productivity gains and transform businesses across the economy.
But those expectations create another vulnerability.
If companies begin cutting AI spending because the returns do not match the huge investments being made, the impact could spread well beyond the technology industry.
Lower spending could weaken corporate investment and put pressure on stock prices. Falling share values could also reduce household wealth, potentially affecting consumer spending.
That matters because consumer demand remains a major engine of the US economy.
What happens if the boom breaks?
Economists differ over how much of the current economic strength can be attributed directly to AI. Measuring the technology's contribution is difficult because investment in data centres, chips and other infrastructure can support several industries at once.
Still, the potential downside of an AI downturn is becoming a bigger concern.
Fitch Ratings recently examined a scenario in which US stock prices fell about 35% over six months, similar to the median decline seen during previous financial busts.
Under that scenario, the US economy could enter a recession, with gross domestic product contracting by about 1.5% the following year.
Olu Sonola, US head of economic research at Fitch, has warned that a major loss of AI momentum could result in stagnation or an outright contraction lasting at least a year.
Trump faces a bigger AI bet
The debate puts Trump in a complicated position. The administration wants the US to remain the global leader in AI, while the economic benefits of the boom have become increasingly important.
The president has also promoted data centre construction as a source of investment and jobs, despite growing opposition in some communities concerned about electricity use, water consumption and the local impact of large facilities.
For now, the AI investment wave continues to support economic activity.
But the growing dependence creates a difficult question for policymakers and investors: whether AI can deliver enough productivity and economic gains to justify the enormous spending being poured into it.
If the answer is no, the consequences could extend far beyond Silicon Valley.
