Massive investments in artificial intelligence that underpinned record runs in equities face a major hurdle as the Middle East ​crisis clouds prospects for growth and energy costs, said Melissa ‌Otto, head of research at S&P Global Visible Alpha.

Before the Iran war broke out, tech giants Microsoft, Amazon, Alphabet and Meta planned to spend about $635 billion on data ​centres, chips, and other AI infrastructure in 2026, S&P Global ​has said.

Read: Underwater data centres, AI-produced toxic proteins and the looming computer memory disaster

That figure was up from $383 billion the prior year ⁠and just $80 billion in 2019.

Although tech companies have yet to signal ​cutbacks in those capital investments, persistently high oil prices could force spending ​revisions in the first and second quarters, bringing a “really meaningful correction in all equity markets,” Otto said.

“I think if the capex numbers get pulled back, if in ​fact energy prices are not reflected in earnings, that could be ​a catalyst,” she added in an interview in Tokyo on Monday.

Euphoria over AI ‌had ⁠carried global stock indexes beyond the highs of 2025, with bright hopes for the trend to run further, but it has lost steam since the conflict.

Read More: OpenAI drops AI video tool Sora, startling Disney, sources say

Tech giants collectively expected to spend at least $630 billion this year on AI. At the same time, energy costs are becoming a constraint.

Data ​centres require vast ​amounts of ⁠electricity, making the AI dependent on power prices and infrastructure capacity.

At the CERAWeek energy conference in Houston last ​week, oil executives warned supply risks are not fully ​reflected in ⁠prices, Otto said, raising concerns about further increases with ripple effects for the global economy.

“We’re seeing this big question around global growth,” Otto ⁠added. “Because if ​you have energy prices jumping 30%, that’s ​going to hurt consumers, that’s going to hurt companies.”