With the Midterms approaching, major financial institutions are flagging an emerging risk many traders overlook: AI politicization. Goldman Sachs recently highlighted how political debates around artificial intelligence—regulation, data privacy, and industrial competition—could create market volatility. As different factions push conflicting narratives, everything from tech stocks to digital assets could face unexpected pressure. The timing matters. Election cycles historically trigger portfolio rebalancing and risk-off sentiment. So what's the smart move? Diversification and strategic hedging. Consider rotating exposure into uncorrelated assets—commodities, stablecoins, or defensive sectors. If you're holding concentrated positions in AI-adjacent holdings, now's the time to think about tail hedges. The political rhetoric around tech will likely intensify in coming weeks, and market dislocations create both risks and opportunities. Those who anticipate volatility usually profit from it.