OECD Warns of AI-Driven Stock Market Bubble Risk to U.S. Economy

The Organisation for Economic Co-operation and Development (OECD) has raised concerns about a potential stock market bubble driven by artificial intelligence (AI) investments, posing a significant risk to the U.S. economy. In its latest Economic Outlook report released on December 2, 2025, the OECD highlighted that while AI-related optimism has bolstered equity markets, a correction could destabilize economic growth.

The OECD forecasts U.S. economic growth at 2% in 2025, a deceleration from the 2.8% growth observed in 2024. The growth rate is projected to further decline to 1.7% in 2026, with a modest recovery to 1.9% in 2027. Additionally, the report anticipates a weakening labor market and persistent inflationary pressures from tariffs.

The OECD's warning about an AI-driven stock market bubble is echoed by other financial institutions. In October 2025, the Bank of England cautioned about the growing risk of a "sudden correction" in global markets due to soaring valuations of leading AI tech companies. The Bank noted that equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence.

The rapid expansion of AI technologies has led to significant investments and high valuations in the tech sector. Companies such as OpenAI and Anthropic have seen their valuations skyrocket, with OpenAI reaching $500 billion and Anthropic increasing from $60 billion to $170 billion within months. This surge has raised concerns about the sustainability of such growth and the potential for a market correction.

The OECD's report also provides insights into the global economic landscape. Global economic growth is projected to slow from 3.2% in 2025 to 2.9% in 2026, with a rebound to 3.1% expected in 2027. The report underscores that rising trade barriers, including recent U.S. tariff hikes, may curb future consumption and investment through higher prices.

The Organisation for Economic Co-operation and Development (OECD) is an international organization comprising 38 member countries. It aims to promote policies that improve the economic and social well-being of people worldwide. The OECD's Economic Outlook is a biannual publication that provides analysis and projections for the world economy, OECD member countries, G20 countries, and key partners.

The concerns raised by the OECD and the Bank of England highlight the need for cautious investment strategies in the AI sector. While AI technologies offer significant potential for innovation and economic growth, the current market exuberance may lead to overvaluations and increased volatility. Investors and policymakers are advised to monitor these developments closely to mitigate potential risks to economic stability.