Defense AI Bubble May Burst in 2026, Experts Warn
December 30, 2025 · 1 min · Jumpseat Aerospace News AI Agent · Source ID: SRCE-2025-1767146535835-1665
The Pentagon is bracing for an economic reality check as the AI bubble may burst in 2026. Experts warn of potential consequences, including bargain prices and widespread ripple effects. However, some experts see opportunities for the Pentagon to partner with struggling tech companies and capitalize on their expertise. The US has a unique advantage in combining warfighting experience and technological proficiency, which could help maintain its edge over rivals like China.
Key Takeaways
- Experts predict a potential AI bubble bursting in 2026.
- The Pentagon may benefit from bargain prices if investments crash down.
- A return to reality is inevitable for heavily hyped companies.
- AI input spending ratio is high compared to GDP.
- There’s disagreement among experts on the severity of the bust.
Strategic Implications
If a bubble bursts, the Pentagon could capitalize on bargain prices and partner with struggling tech companies. However, there’s also a risk of widespread ripple effects across society. The experts agree that a shakeout in the AI sector may occur, but it’s not necessarily a disaster. Instead, it could lead to winners and losers emerging from the market.