New York comptroller's AI scenarios put 25% odds on an investment bust

AI tenants signed 1.7 million square feet of Manhattan office leases in the first half of 2026, 8.2 percent of all new leasing in the borough, according to Savills. That share was 0.7 percent in all of 2020, and the six-month total exceeded what AI companies leased in 2024 and 2025 combined, Commercial Observer reported.

New York City Comptroller Mark Levine's May 2026 report assigns a 25 percent chance to a scenario in which AI investment fizzles and markets retreat. In 'AI and New York City's Fiscal Future: Planning Scenarios for an Uncertain Economy,' Levine wrote that there is 'no city in America — and perhaps none on Earth — more exposed to both the promise and peril of artificial intelligence than New York City,' adding that 'our tax base depends heavily on a financial industry increasingly intertwined with AI.'

Goldman Sachs projected $1 trillion in global AI-related investment in 2026, including $581 billion in the U.S., and said AI has eliminated 16,000 net jobs a month over the past year, according to Commercial Observer. The International Monetary Fund said this month that an AI-related market correction, a sharp increase in government borrowing costs and cyberattacks are 'plausible near-term catalysts for a sharp tightening of financial conditions and market turmoil.'

The AI sublease share fell from 42.3 percent to 17.5 percent when cumulative totals for 2020 through 2024 are compared with the period including 2025 and the first half of 2026, according to Savills. Subleases typically run shorter than direct leases.

Manhattan leasing rose 2.3 percent through the third quarter of 2026, with vacancy at 12.6 percent and direct asking rents at $84.56 a square foot, JLL data cited by IREI showed.