Goldman Sachs Warns Falling AI Spending Could Put Pressure on Stock Markets

Goldman Sachs has warned that the artificial-intelligence investment boom could face a new risk if the cost of AI services continues falling faster than usage expands. The bank’s latest analysis points to the possibility that companies could eventually build more computing capacity than customers can profitably use. That scenario could put pressure on technology valuations and challenge the assumptions supporting the enormous amount of capital currently flowing into AI infrastructure.

The concern comes as spending on AI infrastructure reaches unprecedented levels. Goldman Sachs estimates that U.S. AI investment could approach $600 billion in 2026, equivalent to roughly 2% of the country’s GDP and around 10% of business fixed investment. Much of this money is being directed toward data centers, advanced processors, networking equipment and other infrastructure required to train and operate increasingly sophisticated AI systems.

One of the biggest questions is whether AI demand will grow quickly enough to justify this spending. As AI models become more efficient and the price of using them falls, consumers and businesses may use the technology more frequently. However, Goldman Sachs analysts warn that if prices decline faster than usage increases, revenues across parts of the AI ecosystem could come under pressure. This could particularly affect companies whose valuations depend heavily on continued growth in AI-related demand.

The warning does not mean Goldman Sachs expects the AI boom to collapse. The bank continues to see artificial intelligence as an important source of productivity and economic growth. Goldman Sachs Research estimates that widespread AI adoption could eventually increase labor productivity by around 15% over a decade and add trillions of dollars to annual global economic output. At the same time, the bank acknowledges that the economic returns from AI investment remain an important issue for businesses and investors.

The situation therefore presents a balancing act for the technology industry. Companies need to continue investing enough to develop increasingly capable AI systems, while ensuring that infrastructure spending generates sustainable economic returns. If AI adoption expands rapidly, today’s enormous investment could create the foundation for another major period of technological growth. But if demand or profitability fails to keep pace with capacity, investors could face a significant reassessment of AI-related companies and the wider stock market.