{
  "id": 17818083,
  "title": "‘A major risk to the global economy’: BofA warns about the AI boom the day before a midterm vote framed around data-center backlash",
  "url": "https://urgent.news/2026/11/02/a-major-risk-to-the-global-economy-bofa-warns-about-the-ai-boom-the",
  "topic": "ai",
  "section": "AI",
  "published": "2026-11-02T15:32:33.000Z",
  "source": {
    "name": "Fortune",
    "slug": "fortune",
    "url": "https://fortune.com/2026/11/02/midterms-2026-bofa-ai-correction-risk-global-economy-goldman-tariffs-jobs/"
  },
  "original_language": "en",
  "account": "Global economic experts at BofA warn that a potential correction in the AI sector could pose a significant threat to worldwide stability. This comes on the heels of a midterm election in which data center infrastructure is a hot topic in 10 states. The economists explain that as the expenditure on data center construction continues to rise, there are growing concerns about the sustainability of the AI trade and the mounting risks involved. A slowdown in the sector would directly impact economic growth, as well as wealth effects resulting from reversals in stock gains that have boosted spending. The rise in interest rates is also linked to the borrowing required for the construction boom.\n\nThe backlash against data centers has extended to the political arena, with voters across the nation voicing their concerns through local ballot measures. Out of 41 measures decided this year, six were opposed to construction, and all six received a negative outcome. This opposition has even reached the highest echelons of power, with Texas Governor Greg Abbott halting new approvals pending an audit following local backlash, while his Democratic opponent Gina Hinojosa supports a moratorium. Similarly, Ohio Senator Jon Husted faces criticism over his previous support for data centers in a race that could determine control of the Senate, as the state hosts 21 data-center measures on the ballot.\n\nWhile Goldman Sachs anticipates that the focus on data centers will wane after the midterm elections, the construction boom shows no signs of slowing down. Spending on data-center construction reached a preliminary record annual rate of $84.95 billion in August, a 73% increase from the previous year. J.P. Morgan Asset Management's David Kelly predicts that the strain on construction workers and materials will only intensify in 2027.\n\nDespite the rising costs, the AI boom continues unabated. Capital investment in AI-related hardware has surged by $613 billion above its 2022 level, accounting for approximately 1.9% of GDP. The largest technology firms are set to spend around $800 billion on construction and equipment this year, up 96% from the previous year, with Goldman Sachs projecting a further increase to $1.2 trillion next year.\n\nThe impact of AI on the job market is becoming increasingly evident. Around 24.6% of U.S. businesses now utilize AI in at least one business function, a 0.8-point increase in a single month, with 28.6% expecting to adopt AI within the next half year. Industries such as marketing, graphic design, customer service, and some tech roles are already experiencing reduced job growth and higher unemployment rates, with layoffs attributed to AI reaching 4,000 in September and 207,000 since May 2023.\n\nOutside the AI sector, the rest of the economy is showing signs of strain. The Goldman Sachs Analyst Index, which gauges the opinions of the bank's own stock analysts on their covered companies, fell to 49.1 in October, its lowest level since April 2025. New orders dropped by 33 points to 29.5, marking the lowest point since May 2020. When asked about the top risks for 2027, analysts pointed to the Iran war, tariff increases, and potential spending cuts as major concerns. A Democratic-controlled Congress is expected to tackle issues such as spending deadlines, the debt limit, and expanding health benefits, while reversing last year's cuts could add roughly 0.25% of GDP in spending for 2027.",
  "summary": "Voters in 10 states decide 41 data-center measures Tuesday. BofA’s economists warn a sustained AI correction is a major risk to the global economy.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}