Capital Economics Warns AI Bubble Collapse Could Trigger 30% US Stock Market Decline

Capital Economics has outlined the potential consequences of a collapse in artificial intelligence-related stock valuations, forecasting substantial declines in global equities, limited gains in some government bonds and a weaker US dollar.

In a note published this week, chief economic adviser John Higgins said he sees “plenty of signs that we are now in the late stages of a bubble in AI,” identifying the US equity market as the primary source of potential disruption.