Trump Losing Midterms Could Be the 'Trigger' that Pops AI Bubble, Says Market Analyst — Here's What Crypt

Market research platform Bull Theory said on Wednesday that a Republican loss in the November midterms could be the “trigger” that bursts the AI bubble.

AI Becoming More Dependent on External Financing?

In an X post, Bull Theory argued that the AI industry’s growth is heavily reliant on capital spending, with major hyperscalers, including Amazon.com Inc. (NASDAQ:AMZN) and Alphabet Inc. (NASDAQ:GOOGL), expected to invest nearly $800 billion in 2026, up 10x from 2019.

Bull Theory, citing JPMorgan research, said AI spending is projected to consume 93% of hyperscalers’ cash flow in 2026, up from 33% in 2023.

Additionally, Hyperscalers are projected to issue about $250 billion in bonds in 2026, up from roughly $121 billion a year earlier.

“So AI is becoming more dependent on debt and external financing at exactly the wrong time,” Bull Theory noted.

Financing to Become Tougher?

Bull Theory then drew attention to rising borrowing costs, with the Federal Reserve raising rates to 3.75%-4.00% and Treasury yields reaching record highs.

The firm said that President Donald Trump has been pushing the Fed toward lower rates, and losing Congress “could weaken” his broader ability to push a “pro-liquidity” agenda.