For a company to successfully go public, it may seem essential to have solid finances, but in reality, what matters most is that market conditions are not just favorable, but bullish.

While this did not appear to be an issue at the start of the year, confidence has started to fade as concerns have grown that tech giants like Amazon, Google, Microsoft, and Meta may be overspending on artificial intelligence after announcing plans to invest over $600 billion in AI this year.

The problem is that cutting back on AI spending could hurt the U.S. economy.

For context, according to estimates by the Federal Reserve Bank of St. Louis, AI-related categories — such as data processing equipment, software, R&D, and data centers — contributed approximately 1 percentage point to real GDP growth during the first three quarters of 2025. That represents roughly 40% of total economic growth during that period and even exceeds the contribution of IT investment during the dot-com bubble.

Although there is still no precise estimate of AI’s contribution in 2026, the Federal Reserve expects investment in AI to remain an important driver of growth as companies continue to build infrastructure and integrate AI into their operations. If that growth engine were to stall, overall economic data would likely deteriorate, which would, in turn, affect the S&P 500 and Nasdaq indices.

It’s worth noting, in this sense, that some indicators — mainly the labor market — already suggest the U.S. economy is not in the best shape: job openings have fallen to their lowest levels since 2020, layoffs have increased, and initial jobless claims reached 231,000 at the end of January. On the bright side, if conditions worsen, the Fed may be forced to cut interest rates sooner than expected.

Now, if the situation keeps getting worse and the Fed chooses to stand aside, market confidence could easily take a hit. The same would happen if companies that invest heavily in AI continued to deliver only mediocre results. In that case, what might start as a simple market correction could spiral into a full-blown bear market, and even high-profile plans like SpaceX or OpenAI IPOs might be put on hold.

The takeaway for investors is that, although Goldman Sachs expects the number of IPOs this year to potentially double year over year to 120, if market conditions continue to worsen — whether due to doubts around AI, broader macroeconomic indicators, or the Fed’s actions — companies’ plans could change sharply.