--- title: "The Economy Is Lurching Downward as Fear of AI Spreads" description: "Ongoing fears that the massive amount of money the AI industry is pouring into data centers may not be sustainable are pushing stocks down." date: "2026-02-27" modified: "2026-02-27" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/artificial-intelligence/economy-lurching-downward-fear-ai" categories: - "Artificial Intelligence" --- # The Economy Is Lurching Downward as Fear of AI Spreads ![Ongoing fears that the massive amount of money the AI industry is pouring into data centers may not be sustainable are pushing stocks down.]() *Getty / Futurism* AI chipmaker Nvidia, the world's most valuable company, demolished analyst expectations this week when it [posted]() a massive 73 percent increase in fourth-quarter revenue. But then something strange happened: Nvidia's shares tanked by over five percent following the announcement, as [*Bloomberg* reports](), in its biggest one-day drop since mid-April. It was a baffling reaction to a financial slam dunk, highlighting ongoing fears that the massive amount of money the AI industry is pouring into the construction of gigantic data centers across the country [may not be sustainable](). Tech leaders continue to warn that a [return may still be many years out](), if one ever materializes, while burning through billions of dollars each quarter. By Friday, the situation didn't look much brighter. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite lurched down as fears about the impact of AI on the economy continued to grow. All three indices are in the red for February, indicating persistent widespread uncertainty. Overall, the S&P 500 and Nasdaq Composite are on pace to [experience their worst month since March 2025](). As [*CNBC* points out](), Twitter cofounder Jack Dorsey's fintech company, Block, [announced on Thursday]() that it was laying off nearly half of its workforce, citing AI advances. The move was seemingly seen as a manifestation of fears that AI automation could soon send employment numbers off a cliff, which could have grave economic consequences in the long run. (While slumping Wall Street indices painted a dire picture of the broader economy, Block's shares [shot up in light of the news]().) Following its blockbuster earnings, Nvidia shares also continued to decline on Friday, highlighting skepticism of the AI industry's all-in approach — and lingering worries over whether its growth could be sustained in the long run. Compounding the situation is that inflation shows no sign of letting up. The producer price index, which measures the average change in selling prices for domestic producers, [rose far more than expected in January](), according to recently released data, undercutting president Donald Trump's claims that inflation had been [tamed](). "Inflation isn’t solved yet," Integrated Partners chief investment officer Stephen Kolano told *CNBC*. "It just creates this uncertainty around which way is policy going to go in the remainder of the year." It remains to be seen whether we are indeed on the precipice of a [collapsing AI bubble](). For now, tech companies are treating the current moment as business as usual. Just earlier this week, Meta [agreed to a $60 billion deal]() with AI chipmaker AMD, as fear continues to spread among investors. But given OpenAI recently cutting its enormous $1.4 trillion spending plan [by more than half](), the cracks are starting to show as the [AI race continues to rage on](). **More on the AI bubble:** [*Investors Concerned AI Bubble Is Finally Popping*]() ## 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]()