Analysts warn of the global effects of a hypothetical AI stock crash
Credit rating agencies, international banks and other experts have created scenarios based on a potential loss of confidence in a red-hot sector that is driving the economy forward
Investors' concerns have shifted to the potential slowdown in the rapid advancement of artificial intelligence (AI) technology. Major players such as Anthropic, OpenAI, SpaceX, and Microsoft have requested a slowdown in the development of more advanced AI models. This move introduces a new level of uncertainty, as these companies may reduce their spending levels, a key driver of the current economy.
Despite initial investor concerns, the tech-heavy Nasdaq index showed minimal reaction on Monday. However, the implications of this potential AI stock crash are severe. If stock prices in the AI sector were to plummet by 35% over six months, the United States could face a recession in 2027, according to credit rating agency Fitch. This would have global repercussions, with global GDP growth falling below 1% in the following year.
The impact would be twofold. Firstly, AI stock investors would suffer significant losses, including those in Europe, where euro zone households hold €444 billion in U.S. tech stocks. Secondly, under tighter financial conditions, private capital spending in tech infrastructure could drop by up to 6%, according to Fitch analysts.
While this scenario is not the most dire, it is far from the worst-case prediction. The Bank for International Settlements (BIS) believes the stock market correction could be even more severe than previous innovation waves, such as the dotcom boom of the late 1990s, which caused the S&P 500 index to decline by 50% in two years. Both Fitch and BIS attribute their concerns to a potential drop in the value of AI-related stocks following investor reassessment of the industry's ability to generate profits.
Recently, at a Goldman Sachs event attended by representatives from Google, OpenAI, and SpaceX, it was revealed that companies are demanding tangible results from their AI investments. McKinsey's recent report indicates that only 37% of companies that have implemented AI systems have experienced a positive impact on their gross benefits. Despite this, investment in AI technology continues to grow, accounting for a third of U.S. economic growth this year, according to ING estimates.
Written by urgent.news from El Pais English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
