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Scott Galloway warns US stocks could face an AI-driven crash
He links the risk to AI’s share of S&P 500 exposure, pointing to Fed data showing 39.0% of third-quarter 2025 GDP gains came from AI-related growth.
Scott Galloway, an economic commentator and professor, warned that the US stock market could face a major downturn within 24 months, arguing that AI-driven valuations are hard to justify. He said he is concerned because roughly 40% of the S&P 500 is tied to AI-focused businesses.
In his view, the situation is vulnerable if AI investment slows, which he said could push the US into a recession quickly. Galloway cited Federal Reserve data that showed 39.0% of total GDP gains in the third quarter of 2025 were driven by AI growth across categories including software, research and development, information processing technology, and data center construction.
The article also points to Wall Street estimates that AI spending could contribute materially to earnings growth, with Goldman Sachs estimating AI investment could account for 40% of S&P 500 earnings growth in 2026. It adds that major cloud companies are expected to collectively spend $674 billion on capital expenditures this year.
Despite ongoing strength in the index, fueled by earnings from megacap AI-related companies, the piece frames the key risk as concentrated overinvestment. Galloway said founders are increasingly worried about a crash in the next 12 to 24 months, and he referenced cheaper AI alternatives from China as another pressure point for US AI companies.
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