Artificial intelligence bubble may be biggest risk for 2026

LONDON

The cooling of the artificial intelligence (AI) boom and the decline of tech valuations pose the biggest risk for next year, a recent Deutsche Bank survey showed.

Of the 440 respondents in the survey, 57% cited the AI bubble as the biggest risk, as concerns over AI and tech valuations surpassed all other risks to market stability in 2026.

Some 27% of respondents said the upcoming Fed chair could push for more aggressive cuts, which could lead to turmoil, while 22% expect a capital market crisis next year.

Concerns over bond yields, rising interest rates, and a larger impact of AI on the labor markets were other largely expected risks.

While 41% of respondents believe Fed Chair Jerome Powell could remain as a governor and retain his voting rights after his term ends in May, respondents were still uncertain about this issue.

Developments over Powell’s position are expected to be an important issue next year, as the vast majority of Fed chairs leave the bank immediately after their terms are due.