The Trump administration has publicly embraced generative artificial intelligence, but a leaked internal Treasury Department report suggests officials are privately aware that the fast-growing industry could pose a serious threat to the U.S. economy if expectations around the technology are not met.
According to the draft report obtained by NOTUS, Treasury analysts warned that AI companies are now deeply tied to major parts of the financial system. The report said a downturn in the AI sector could create broad economic fallout, affecting markets, lenders, infrastructure companies and utilities.
The warning comes as the Trump administration has strongly supported the AI industry. President Donald Trump signed an executive order last December aimed at blocking states from creating their own laws to regulate the technology. His administration has also promoted policies to accelerate AI development, including support for data center construction and the repeal of Biden-era AI regulations.
But the leaked Treasury report paints a more cautious picture of the industry’s risks. “Career Treasury analysts found that AI firms are more deeply entrenched in the U.S. economy than their dotcom predecessors and pose significant risk to the entire system if financial conditions change, productivity goals are missed, or various choke points stymie growth,” NOTUS’ report reads.
The analysts warned that the financial consequences could spread well beyond the companies developing AI tools. “A downturn in the AI market would send shockwaves throughout the entire economic ecosystem, the analysts wrote.”
According to NOTUS’ review of the report, Treasury analysts said that if AI companies face financial trouble, the damage could extend to “stock markets, private credit markets, companies financing data center buildouts, cloud providers, chip manufacturers and utilities would all feel the effect.”
The report also suggests that investors are making increasingly large bets on the technology, with much of the market’s confidence tied to whether AI companies can deliver meaningful productivity gains and long-term profits.
“AI investors are taking risks so significant that much of the financial system now rests upon AI meeting expectations for productivity gains and profitability,” NOTUS’ report reads. Publicly, however, the administration has remained enthusiastic about the industry’s future.
In its coverage, NOTUS noted that the Trump administration has “shown nothing but bullishness toward the AI industry.” The administration’s AI Action Plan aims to accelerate the development of generative AI data centers, while Trump and his allies have backed major AI projects as part of a broader push to keep the United States ahead in the technology race.
The leaked report suggests that, behind closed doors, some officials are weighing a different concern: whether the AI boom has become so large and interconnected that a slowdown could create risks across the entire economy.