Protect the Public from AI Data Center-Fueled Economic Collapse

Tech firms are investing an eye-watering amount of capital into AI infrastructure based on projected future demand that is detached from demonstrated need.1 Firms are taking on record levels of debt to build data centers, raising the alarm for economists concerned with firms’ ability to pay down their debts with a steady cash flow.2 At the same time, AI firms are increasingly reliant on circular spending deals— where AI companies invest in and buy from one another—which can create skewed market incentives and distort decision-making.3 Because only a handful of buyers represent a large share of the overall market, circular spending deals in a market downturn can drive cascading negative effects.4 This instability threatens not only the health of our overall economy and financial institutions, but the pocketbooks of millions of Americans, including their life savings, retirement plans, pension funds, and life insurance policies.

  1. Sheryl Estrada, “MIT Report: 95% of Generative AI pilots at Companies Are Failing,” Fortune, August 18, 2025, https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo; David Crawford, Anne Hoecker, and Dana Aulanier, Technology Report 2025, September 2025, https://www.bain.com/insights/topics/technology-report; and Meghan Bobrowsky, “Big Tech Is Spending More than Ever on AI and It’s Still Not Enough,” Wall Street Journal, October 30, 2025, https://www.wsj.com/tech/ai/big-tech-is-spending-more-than-ever-on-ai-and-its-still-not-enough-f2398cfe. ↩︎
  2. Aaron Gregg, “Big Tech Is Taking On More Debt than Ever to Fund Its AI Aspirations,” Washington Post, January 23, 2026, https://www.washingtonpost.com/business/2026/01/23/ai-corporate-debt-record. ↩︎
  3. Cedric Sam, Rachael Dottle, Agnee Ghosh, and Kyle Kim, “A Guide to the Circular Deals Underpinning the AI Boom,” Bloomberg, January 22, 2026, https://www.bloomberg.com/graphics/2026-ai-circular-deals. ↩︎
  4. Ibid. ↩︎