The real reason for Trump’s pedal-to-the-metal approach on AI

President Donald Trump is suddenly at odds with AI's leading executives over the largely unchecked development of AI technology. And it may be because our economy can't afford a slowdown.

It might seem politically ill-advised, less than two months before the midterm elections, to so forcefully stake out a position that's out of step with the majority of Americans, who overwhelmingly oppose data centers being built near them and remain suspicious of AI's use cases. But Trump's pedal-to-the-metal approach suggests he may be more concerned about a bigger question: What happens to the US economy if the AI fever breaks on his watch?

There are a lot of ways to slice the metrics on just how dependent the US economy has become on AI (and AI-adjacent) spending. ING estimates tech investments dominated by AI and data centers account for a third of year-over-year economic growth in 2026. Goldman Sachs' chief equity strategist recently told CNBC that AI investment is driving half of all the profit growth in the S&P 500.

Economists are careful to note how there's always nuance in these calculations. But one thing is hard to dispute: Absent the AI frenzy, the economy would be in a much weaker position — possibly even in a recession.

AI bulls believe it is the defining technology of our time, and that the stratospheric share prices it's creating are just one of its many benefits. With widespread adoption in the future, the thinking goes, AI will turbocharge productivity the way the internet did at the turn of the century.

But in the near future, any slowdown in spending risks undoing those stock valuations, which would in turn ding household wealth and diminish corporate investment.

"If the music stops, and if it stops in a big, big way, it's likely that we're going to end up in stagnation or outright contraction over a period of at least a year," Olu Sonola, US head of economic research at Fitch Ratings, told CNN.

The icing on the cake, said Sonola, is the wealth effect. People with stock portfolios exposed to AI are feeling flush , and they're spending lavishly — further helping prop up America's consumer-centric economy.

Whatever people's personal beliefs about the technology, the money going into it is keeping the world's biggest economy humming. If that money train stalls, the effects won't be contained to tech investors on Wall Street.

Last week, ratings agency Fitch ran a scenario imagining the economic outcome of an AI-related downturn, with US stock prices falling around 35% over six months — roughly the median decline of past financial busts. The result was that the economy would go into recession, with GDP contracting 1.5% next year.