US AI boom drives markets and debt to new heights, while power demand is set to soar

Artificial intelligence is no longer a niche theme; it is the engine powering US markets and reshaping how investors must navigate risk.

According to the newly released 2026 Global Outlook from the BlackRock Investment Institute the shift toward technology requiring massive capital investment is transforming both economic growth and market structure. With AI spending heavily front-loaded and payoff lagging, firms are leaning more on financing and the risks are spreading through the financial system.

BlackRock estimates US corporate AI investment ambitions fall within a $5-8 trillion global range through 2030, most of that in the US. The researchers say that capital push is already supporting economic expansion, noting that the contribution to US growth from investment is totaling three times its historical average this year.

The report adds that a breakout from the long standing 2% national growth trend - something no innovation from electricity to the digital revolution has achieved - is now “conceivable for the first time” thanks to AI’s ability to accelerate innovation itself.

However, capacity constraints pose real headwinds with data center energy needs alone potentially reaching 15-20% of current US electricity demand by 2030, with some projections nearing 25%.

“Companies haven’t struggled to get chips — the real constraint is land and energy,” said Alastair Bishop, a BlackRock portfolio manager.

AI spending demands are occurring alongside record high federal leverage. US government debt has surged to post-war highs, while corporations have lowered debt burdens, giving tech room to lever up, according to BlackRock’s data.

That growing reliance on borrowing “creates a more levered financial system vulnerable to shocks – including bond yield spikes tied to policy tensions between inflation and debt sustainability.” The firm maintains a tactical underweight to long-term Treasuries, citing rising term premiums.

As AI drives US equity performance, the market has narrowed toward a few dominant companies. BlackRock’s analysis shows a sharply rising share of S&P 500 daily returns explained by a single factor even after accounting for style effects, evidence, it says, of a “diversification mirage.”

This year, the equal-weighted S&P 500 gained just 3% compared with 11% for the cap-weighted index illustrating that allocations made under the guise of diversification may now in fact be big active bets.

The institute stays overweight US equities and sees AI continuing to broaden across supply chains and industries.

The firm flags infrastructure, particularly power systems and grid expansion, as a critical long-run beneficiary of AI’s physical demands.

Private credit is entering a “more uneven phase,” with rising covenant defaults among small borrowers. Yet the dispersion is viewed as a source of potential alpha for experienced lenders.

The US remains the epicenter of the AI wave and BlackRock remains risk-on, but investors should expect higher financing costs, more volatility and fewer reliable hedges. In short, the AI boom is pushing limits on growth and leverage alike. Active positioning, the report suggests, is no longer optional, it’s survival.