Energy hunger brakes chip rush: WTO warns of end to AI boom

The global economy is at a turning point where the promises of artificial intelligence meet the harsh reality of global energy policy. In its “Global Trade Outlook 2026,” the World Trade Organization (WTO) paints a picture marked by extreme volatility. Despite high trade barriers and the protectionist tariff policy of Donald Trump, 2025 was surprisingly robust. But now, the dark clouds on the horizon are hard to ignore. The main reason for the Geneva experts' concern is a paradoxical interaction: the technology that has recently supported global trade has become its biggest Achilles' heel.

AI has rapidly evolved from a niche topic to the backbone of global investment growth. According to WTO data, AI-related goods accounted for around 70 percent of total investment growth in North America last year. For comparison, in the years before the 2008 real estate crash, the construction sector accounted for only 30 percent.

This high concentration carries risks. WTO Chief Economist Robert Staiger highlighted during the presentation of the trade outlook that the key technology is still unproven in terms of its actual long-term ability to deliver results. Furthermore, as investments are concentrated in a small group of extremely large corporations, any shock to confidence or the framework conditions could have fatal consequences.

Middle East conflict threatens compute power supply

According to the WTO, the conflict in the Middle East, with the Iran war at its center, plays a role here. The region is not only a geographical bottleneck for global trade but, above all, a major supplier of energy and fertilizers. A prolonged period of high oil prices would massively drive up the operating costs of the already extremely energy-intensive AI infrastructure, warns the international organization.

The operation of data centers and the manufacturing of modern semiconductors consume vast amounts of electricity. If energy prices remain high throughout 2026, this could significantly “pinch” the AI boom, according to Staiger.

The WTO estimates that a sustained energy shock would reduce merchandise trade growth by an additional 0.5 percentage points. This would bring the already cautious forecast of 1.9 percent growth dangerously close to stagnation. In addition to energy costs, the political landscape is fundamentally changing trade flows. The US under Trump has raised tariffs to a level not seen in decades. In 2025 alone, this led to a 29 percent drop in US imports from China.

New trade routes and dwindling WTO principles

Nevertheless, global trade grew by 4.6 percent overall, as many companies pulled forward their imports before tariffs took effect and China successfully rerouted its trade flows to Asia, Africa, and Latin America. The economies of Singapore, Thailand, and Vietnam, in particular, benefited from this shift and acted as new engines of global trade. However, the fragmentation of the global economy is becoming increasingly apparent. The share of trade settled under the WTO's so-called most-favored-nation principle fell from 80 percent in 2024 to just 72 percent at the beginning of 2026.

This means that more and more deals are influenced by bilateral special agreements or protectionist hurdles. The WTO itself is struggling for relevance in this environment, while the major blocs between the US and China are tearing apart global supply chains. For the current year, the crucial question remains whether the momentum in the AI sector is sufficient to offset the pull of high energy costs and geopolitical tensions. According to trade experts, the global economy is heading for a year in which the computing power of chips competes against the extraction capacity of oil wells.

(nen)