Possible AI Crash? No, Not Any Time Soon

The current AI buildout is increasingly fuelled by debt and financial leverage, a trend highlighted by Anthropic’s S1 filing and forecasts for accelerating corporate borrowing.

We are already seeing debt markets react to this massive demand for capital through rising corporate and government yields. In a heavily leveraged macro environment, highly indebted systems cannot tolerate prolonged liquidity scarcity. If these borrowers fail to generate productive returns to service their debt, we risk a serious credit crunch or 2008-style debt dislocation.