--- title: "Deutsche Bank Issues Grim Warning for AI Industry" description: "Economists [keep warning]() that the US economy is being propped up almost entirely by an enormous boom in the tech and AI sector. Should the rest of us be worried?" date: "2025-09-24" modified: "2025-09-24" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/artificial-intelligence/deutsche-bank-grim-warning-ai-industry" categories: - "Anthropic" - "Artificial Intelligence" - "Finance" - "Future Society" - "Google" - "Investing" - "Meta" - "OpenAI" --- # Deutsche Bank Issues Grim Warning for AI Industry ![Deutsche Bank is warning that AI spending won't "remain parabolic," or continue to increase exponentially, a dire warning for the future.]() *Getty / Futurism* Economists [keep warning]() that the US economy is being propped up almost entirely by an enormous boom in the tech and AI sector. Should the rest of us be worried? Multibillion-dollar investments have become the norm as AI companies continue to double down on enormous [infrastructure buildouts]() and [talent acquisitions]() that they insist will undergird a new economy in which huge amounts of human labor are automated away. In a new research note, as [*Fortune* reports](), the international finance giant Deutsche Bank is warning that AI spending can't continue to increase exponentially. And if spending were to slow down without realizing the tech's outsize promises, the analysts caution, it could reveal an economy in tatters — marked by [unemployment, lower household incomes, and inflation]() — that had been hidden by an irrational optimism in the power of AI. "AI machines — in quite a literal sense — appear to be saving the US economy right now," Deutsche Bank head of FX Research George Saravelos wrote to clients. "In the absence of tech-related spending, the US would be close to, or in, recession this year." Current growth is also "not coming from AI itself but from building the factories to generate AI capacity," he added, suggesting that the tech industry is selling a still-hypothetical future rather than delivering a real one. It's true that investment in AI has reached a fever pitch lately. Earlier this week, AI chipmaker Nvidia [announced]() that it's pouring $100 billion into OpenAI as part of a "strategic partnership" to "build and deploy at least ten gigawatts of AI datacenters" — a deal that critics [immediately slammed]() as self-serving. "It may not be an exaggeration to write that NVIDIA — the key supplier of capital goods for the AI investment cycle — is currently carrying the weight of US economic growth," Saravelos argued. "The bad news is that in order for the tech cycle to continue contributing to GDP growth, capital investment needs to remain parabolic," he concluded. "This is highly unlikely." He's right to be concerned. Total AI spending has [contributed more to the growth of the US economy]() this year than all of consumer spending combined. Especially alarming is the amount of money the AI industry would need to actually make to justify all its spending. According to a [new report]() by global management consulting company Bain & Company, it'd need a whopping $2 trillion in annual revenue to "fund computing power needed to meet anticipated AI demand by 2030." "However, even with AI-related savings, the world is still $800 billion short to keep pace with demand," the report reads. Others remain more optimistic, with Goldman Sachs arguing that productivity gains thanks to AI adoption could ultimately boost the economy, according to a note to clients seen by *Fortune*. However, reality has often been messier than those predictions. Earlier this year, MIT researchers found that a [staggering 95 percent]() of attempts to incorporate generative AI into business so far are failing to drive rapid revenue growth. Researchers have [also found]() that employees are actually being slowed down by AI "workslop" that needs to be fixed by a human with common sense. In other words, it's no wonder economists are warning that over-relying on a comparatively tiny number of extremely highly valued tech companies for growth could eventually leave the US economy exposed if the AI industry's most wild and self-serving predictions don't come true. "The bottom line is once again that there is an extreme degree of concentration in the S&P 500, and equity investors are dramatically overexposed to AI," Apollo chief economist Torsten Sløk wrote in a [note]() last week. **More on the AI bubble:** [*The AI Bubble Bursting Would Actually Be Incredible for the Economy, Economist Says*]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()