Chinese-Canadian educator and geopolitical analyst Professor Jiang Xueqin has issued a prediction that escalating tensions in the Middle East could trigger a collapse in the artificial intelligence sector and broader damage to the U.S. economy.
Jiang first gained widespread recognition for forecasts made in a 2024 lecture. He accurately anticipated Donald Trump’s return to the presidency and the outbreak of U.S. military action against Iran.
Now, in an interview with Breaking Points published on March 2, Jiang argued that Iran’s asymmetric warfare strategy targets not only military assets but also the economic foundations supporting U.S. dominance.
Jiang described the American economy as heavily dependent on petrodollar recycling from Gulf Cooperation Council (GCC) nations.
These countries, he explained, channel oil revenues into U.S. markets, with a substantial portion recently directed toward AI infrastructure, particularly the construction and operation of vast data centers that have helped propel stock market valuations in the sector.
Jiang predicted that prolonged disruption to Gulf oil exports and investment flows, caused by Iran’s asymmetric warfare capabilities, would burst this AI investment bubble.
He characterized the broader U.S. economy as reliant on speculative financial mechanisms resembling a Ponzi scheme, leaving it vulnerable once the influx of Gulf capital dries up.
“So if the Gulf states are no longer able to sell oil and they’re no longer able to finance AI, this is AI bubble in the United States will burst as well as as the entire American economy, which is really a financial Ponzi scheme,”Jiang said.
How Iran could disrupt global economy
The professor outlined how Iran could achieve this disruption through low-cost drones targeting critical civilian infrastructure, such as desalination plants in Saudi Arabia’s capital, Riyadh, potentially cutting off water to a city of 10 million people within two weeks.
He further noted that Iran’s effective blockade of key maritime routes has already choked food imports to the region, where up to 90% of supplies arrive via these passages, putting Saudi Arabia, the United Arab Emirates, Bahrain, and Qatar under severe pressure.
This scenario, Jiang argued, directly threatens the GCC states’ ability to sustain petrodollar investments, thereby striking at the financial underpinnings of the current AI boom in the United States.
Global stock markets have experienced heightened volatility and declines due to the conflict’s economic ripple effects.
Emerging markets have been hit hard, with airline stocks falling and broader declines tied to supply chain fears.
However, some recovery occurred mid-week, with the S&P 500 rising 0.8% in one session as investors assessed the conflict as potentially contained.
Safe-haven assets such as gold have climbed, while homebuilding and energy stocks have shown mixed reactions.
Overall, markets view the war as a short-term dent but warn of prolonged inflation and economic slowdown if disruptions persist.
Featured image via Shutterstock
