Scott Galloway warned the US stock market could crash within 24 months thanks to AI. Protect your nest egg while you can

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Earlier in 2026, economic commentator and professor Scott Galloway, or Prof G, warned that with about 40% of the S&P 500 tied to AI-focused businesses, investors may need to reevaluate their risk exposure or prepare for a portfolio wipeout.

"There's no way they can justify these incredible valuations," Galloway said on an episode of The Diary of a CEO podcast (1). He also noted that one of the greatest threats to American AI companies is cheaper Chinese alternatives.

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He explained that the "majority of GDP growth over the last two years has come from AI," and that if that slows, the U.S. would plunge into a recession "immediately."

Data from the Federal Reserve Bank of St. Louis backs this up. The Fed found that 39% of total GDP gains in the third quarter of 2025 were driven by AI growth in areas such as software, R&D, information processing technology and data center construction (2).