Stock sell-off exposes risks to Greater Manchester’s AI growth plans

Global stock market falls are intensifying concerns about whether heavy AI spending will deliver adequate returns. The S&P 500 fell 4.4%, while the Nasdaq closed in correction territory. Between 6 October and the end of the month, 47 AI and chip stocks lost around $5 trillion in value, while the other 625 large US stocks in the same analysis gained $1.3 trillion. Rising energy costs, expensive borrowing and expectations of tighter rules on data centres are adding pressure to infrastructure providers.

Greater Manchester faces exposure through pensions, investments and development plans. A GMCA-commissioned study identified 663 businesses developing or using AI and estimated the wider regional AI workforce at almost 11,000. A prolonged investment downturn could delay planned data centres, including projects in Stockport, and undermine anticipated jobs and business-rate revenue. Start-ups that compete mainly by replacing workers with AI could also weaken local employment and shift spending from wages to external technology suppliers.

Councils, businesses and residents could face higher charges or tighter usage limits if providers become less willing to absorb losses. Regional planning should account for reduced investment and potentially higher service costs. Public bodies should assess the impact if AI prices doubled, retain skills needed to operate essential services without these tools and secure workable supplier-switching or contract-exit terms. Start-up support should weigh service improvements, sustainable employment and locally retained income alongside growth.