"I wonder where there's hidden secret leverage. Now everyone says, 'Oh, the world's not leveraged.' That's exactly what everybody said in the mortgage crisis until you suddenly discover that there was a lot of mortgage risk in Iceland. It sort of smells like that kind of a moment again."
"One has to worry about opaque assets where there's illiquidity. We're getting close to the end of late stages of cycles on this - and we're due for a kind of a reckoning."
"I don't feel the storm, but the horses are starting to whinny in the corral."
AI companies are projected to invest a record $650 billion in 2026 on data center buildout, alarming investors who fear massive overinvestment in physical assets. A Bank of America survey shows over one-third of fund managers believe corporations are overinvesting. Despite these enormous expenditures, AI ventures remain largely unprofitable. Former Goldman Sachs CEO Lloyd Blankfein warns of hidden leverage and illiquid assets accumulating in the system, comparing current conditions to pre-2008 mortgage crisis dynamics. He expresses concern about opaque assets and the precarious timing of AI companies seeking public investment, suggesting a financial reckoning may be approaching.
#ai-investment-bubble #financial-crisis-risk #hidden-leverage #data-center-spending #market-overinvestment
Read at Futurism
Unable to calculate read time
Collection
[
|
...
]