Artificial intelligence-driven inflation will be the biggest risk for 2026, according to investors
Global stock markets, which are abuzz with artificial intelligence euphoria in early 2026, may be ignoring one of the biggest threats that could spoil the party: a surge in inflation fueled in part by a boom in technology investment.
US stock indexes, where seven technology groups contributed half of all market gains this year, posted double-digit gains in 2025 to record levels, while enthusiasm around artificial intelligence and monetary easing also boosted European and Asian stocks to record highs.
Expectations of further interest rate cuts have also supported bonds, giving U.S. Treasury investors their best annual performance in five years, while inflation retreated, though it remains above the Federal Reserve's 2% midpoint target.
For 2026, waves of government stimulus in the US, Europe and Japan, as well as the artificial intelligence boom, are expected to drive global growth.
This has caused money managers to brace for accelerating inflation, prompting central banks to end their interest rate-cutting cycles, putting an end to the easy flow of money into markets obsessed with artificial intelligence.
The construction of new data centers was also an inflationary force, analysts said, because of the pace at which these projects are consuming energy and advanced chips. They said U.S. consumer price inflation would remain above the Federal Reserve’s 2% target through the end of 2027, partly due to large corporate investments in artificial intelligence.
Markets have already shown early signs of nervousness about rising costs and potential overspending on artificial intelligence.
Deutsche Bank expects capital spending on artificial intelligence data centers to reach $4 trillion by 2030, and the rapid implementation of these projects could cause supply bottlenecks for chips and electricity, which would cause investment costs to spiral upward, the bank's analysts said.
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