Investing.com -- The biggest risk facing AI investors is not technological failure but political backlash, according to BCA Research, which warns that regulatory and tax pressure on the sector could accelerate significantly after the 2028 U.S. election.

Chief Geopolitical Strategist Matt Gertken stated in a note that political opposition to AI is building globally, with politicians in the U.S. and abroad proposing measures including regulation, taxation, redistribution, and restrictions on data center construction.

BCA’s top takeaway is that "the populist backlash against AI could result in bipartisan regulation in 2027, but is especially likely to prompt tax hikes from 2029."

Job displacement is identified as the core concern driving opposition, with resistance strongest in service-oriented economies where workers fear automation.

BCA also flagged deteriorating public sentiment in the U.S., where Americans are increasingly viewing AI as developing too quickly and growing less optimistic about the technology’s benefits, particularly among younger generations.

Drawing on historical precedent, BCA noted that major regulatory crackdowns on industries such as nuclear energy, healthcare, and banking occurred only after catalytic events.

AI has not yet triggered a specific crisis, the firm said, though it cautioned the technology "could be scapegoated amid an unrelated crisis."

BCA concluded that "the investment risk is political, not technological," warning that a recession, AI-driven mass layoffs, inflation, or a major AI-related accident could mobilize voters and lead to aggressive regulation or higher taxes on technology firms "as early as next year — and especially after the 2028 election."