POLISCOPE
Back to feed
NewsLos Angeles Times – PoliticsOctober 25, 2026Los Angeles County

Trump's AI push fuels economic uncertainty and bubble fears ahead of midterms

Photo: Los Angeles Times – Politics

As voters head to the polls amid midterm elections, President Trump's aggressive push for artificial intelligence dominance and data center expansion has triggered warnings from economists and financiers about a potential market bubble and severe economic risks. While Trump vows to maintain a prosperity boom, experts point to strained federal finances, heavy stock market concentration in AI, and rising costs from tariffs and energy as factors that could leave the economy vulnerable to a major downturn over the next two years.

Artificial IntelligenceEconomyStock MarketInflationFiscal Policy
Read the full story at Los Angeles Times – Politics

Why It Matters

Voters face mounting financial pressures as inflation climbs back to 3.7% and interest rates remain elevated, while experts warn that an economic downturn tied to overextended AI investments could constrain the government's ability to respond to a financial crisis.

Key Facts

  • Spending on data center infrastructure accounted for nearly all U.S. economic growth last winter and spring.
  • The Nasdaq 100 has about 70% of its index weight in companies dependent on artificial intelligence.
  • Inflation has climbed back to 3.7% under Trump, driven by rising energy, transportation, and housing costs.
  • A Fox News poll found that 77% of Americans rate the economy as fair or poor heading into election day.
  • Only 34% of surveyed Americans approve of Trump's handling of the economy, according to a CNBC survey.
  • Leading financiers including Ray Dalio and Ken Griffin have warned that AI stocks are forming a market bubble.
  • Tariffs and visa restrictions have raised costs for imported chips, servers, metals, and electrical components, creating financial headwinds for AI firms.
  • Leading AI companies are running 'day-after' drills in anticipation of an AI-related crisis within the next year.

Who's Mentioned

OrganizationMicrosoft“Early AI adopter scaling back use.”PersonTrump“U.S. President dismissing AI concerns and pushing for AI dominance.”OrganizationOpenAI“AI industry leader expecting to go public next year.”OrganizationAnthropic“AI industry leader planning an initial public offering.”OrganizationWalmart“Early AI adopter scaling back use.”PersonKenneth Rogoff“Harvard economist warning of potential stock market drops and recession.”PersonDarrell Duffie“Finance professor at Stanford Graduate School of Business.”OrganizationMeta“Early AI adopter scaling back use.”PersonBiden“Former U.S. President whose presidency ended with lower inflation.”PersonServaas Storm“Economist at Delft University of Technology analyzing AI sector headwinds.”PersonKen Griffin“Hedge fund owner warning of an AI market bubble.”PersonXi Jinping“China's leader.”PersonRay Dalio“Founder of Bridgewater Associates warning about detached AI stocks.”