Artificial Intelligence

Iran war could wipe out AI boom, WTO says

If the energy crisis comes to full fruition, it will slow down the current AI boom: high oil prices due to the Iran blockade and Trump tariffs are threatening data centers worldwide. The WTO is now warning of a trade slump – will the tech bubble burst in 2026?

Energy crisis threatens AI expansion

The year 2026 could bring an unexpected turning point for the IT industry and the global economy. After strong growth through massive AI investments, there are signs of a slowdown. The World Trade Organization (WTO) only expects 2026 1.9 percent growth in goods trade. The causes are high energy costs due to the Middle East conflict and new US tariffs under President Donald Trump. The construction of new data centers is coming under pressure. These systems are extremely energy intensive. If oil and liquid gas prices remain high, operations will become uneconomical. The US tariffs also make hardware imports more expensive and put a strain on global supply chains. Trade in AI-enabled goods, which rose to $4,180 billion in 2025, is in danger of collapsing.

WTO chief economist Robert Staiger warns that high energy prices could dampen the AI ​​boom. With prices remaining high, global trade will shrink by 0.5 percentage points.

Geopolitics drives energy costs

Iran’s blockade of the Strait of Hormuz is driving up oil prices. It also hinders fertilizer transport. Attacks on liquefied natural gas facilities in Qatar add to market turmoil. However, data centers require stable power supply around the clock. In the USA, the main market for tech companies, electricity is still partly based on fossil fuels. Training large language models consumes energy like a small town does in a year. Rising fuel costs are driving up operating expenses and forcing planned expansions to be suspended.

Danger of a technology bubble

A comparison shows the fall height. In 2025, AI goods accounted for 70 percent of investment growth in North America. Before the real estate crash in 2008, it was only 30 percent in the construction sector. Economic performance now depends heavily on one sector.

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Published by
Priti Rajpoot

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