How an AI Slowdown Could Reshape the U.S. Economy

Leading AI executives have warned that rapid development could create rogue AI systems, prompting calls to slow progress and raising fears of an economic pullback. The warnings triggered a selloff of tech stocks this week, as investors worry about reduced capital expenditure. AI and its infrastructure investments now contribute significantly to U.S. GDP growth, with estimates ranging from a quarter to as much as 40 percent. A severe AI-related equity price shock could push the U.S. economy into a recession, according to Fitch Ratings. Officials and analysts also debate the risk of ceding the AI lead to China, which could boost its economic and military competitiveness. However, some note that the primary threat to households may be labor market disruption, not existential catastrophe.