AI boom under threat from tariffs, global economic turmoil | Reuters

Despite the AI investment boom, fueled by companies like Microsoft and Amazon, a potential global trade war initiated by the Trump administration threatens to disrupt the industry's growth. Upcoming earnings reports from tech giants and utilities will reveal if tariffs between the U.S.

and China are impacting ambitious infrastructure plans, as clients slow spending amid uncertainty. Tariffs, particularly on Chinese goods, could significantly increase data center costs, impacting supply chains crucial for AI hardware production. While companies like Google and Microsoft reaffirm their capital expense plans, there are signs of a slowdown in data center build-up, with Microsoft abandoning some projects and Amazon delaying new data center leases.

Despite these challenges and slower revenue growth projections, some investors believe the long-term potential of AI justifies continued investment, anticipating substantial returns in the coming years.