AI Investment Boom Poses Significant Risk to US Economic Stability: Jefferies Warns

• Jefferies warns that a sudden collapse in AI investment could severely impact US economic growth, as it has been a main pillar of support.
• UN report highlights massive surge in US AI sector investment: $87B (2022) to $150.6B (2024).
• AI-linked capital expenditure was the largest contributor to US economic growth in 2025, after personal consumption.
• Concerns rise about sustainability of AI returns by mid-2026 and potential excess capacity in data centers.
• AI investment cycle is vulnerable to abrupt reversals due to shorter technological life of AI chips (3-4 years vs. 25 years for fiber-optics).

Why It Matters: The AI investment boom, while driving US growth, presents a significant risk of economic instability due to potential over-investment.