From Fortune · Nick Lichtenberg · · 2m
BofA warns AI boom poses major economic risk
Bank of America flags a sustained correction in AI spending as a major threat to global growth, as voters reject data-center expansion in 10 states.
In brief
Bank of America flags a sustained correction in AI spending as a major threat to global growth, as voters reject data-center expansion in 10 states. Bank of America warns a correction in AI spending poses major economic risk as voters reject data-center expansion in midterm elections. Originally reported by Fortune.
BofA flags AI correction risk
Bank of America Global Research economists warned Monday that a sustained correction in the AI trade poses a major risk to the global economy.
“A sustained correction in the AI trade is a major risk to the global economy”
Rising capex creates mounting risks
As capital expenditure on AI infrastructure rises, investors grow increasingly concerned about sustainability. A slowdown would hit growth directly and through the wealth effect.
“Investors are increasingly concerned about the sustainability of the AI trade, and the more capex rises, the more risks loom”
Voters reject data-center expansion
Voters will decide forty-one local data-center ballot measures on Tuesday, from new requirements for developers to outright bans. All six measures already decided this year went against development.
Data centers become campaign issue
In Texas, Governor Greg Abbott halted new data-center approvals pending an audit after rural backlash. In Ohio, Senator Jon Husted faces criticism over past data-center support with twenty-one measures on Tuesday's ballot.
AI spending hits record levels
Spending on data-center construction hit a preliminary record annual rate of eighty-four point nine five billion dollars in August, up seventy-three percent from a year earlier, according to the Census Bureau.
AI adoption accelerates job losses
Twenty-four point six percent of U.S.businesses now use AI in at least one business function.Industries with higher AI adoption show weaker job growth and higher unemployment.
Goldman expects tariffs to rise
Tariffs will increase regardless of election outcome. Goldman Sachs expects President Trump to announce new tariff increases after the election that more than offset any Democratic targeting, raising the effective tariff rate by a little…
AI fight moves to regulation
In Congress, the AI fight is expected to shift from data centers to regulation. Goldman Sachs sees room for compromise on basic federal oversight and self-testing, with little appetite for anything restrictive.
The headline
Bank of America warns a correction in AI spending poses major economic risk as voters reject data-center expansion in midterm elections.
