The vibe check just got a little less bubbly
Robert Cohen, who runs global developed credit at DoubleLine, told a Bloomberg Global Credit Forum panel in New York that AI debt will almost certainly reach bubble levels. Translation: the money machine behind the AI boom may be getting a little too enthusiastic for its own good.
That matters because AI hasn’t just been a stock-market story. It’s also become a funding story — think heavy borrowing, big capital commitments, and a lot of investors acting like the future already showed up with a hardcover revenue forecast.
Why credit folks are side-eyeing the party
When credit investors start talking bubble, they’re usually looking at the plumbing, not the fireworks. If companies keep stacking debt to chase AI infrastructure, the risk isn’t just a few bruised balance sheets. It can ripple into:
- tighter lending standards
- wider spreads on risky debt
- more scrutiny on AI-linked borrowers
- pressure on the frothiest parts of the trade
Big picture: the AI story is bigger than the stock chart
The equity market gets the headlines, but credit is where optimism eventually has to meet a repayment schedule. If the AI buildout keeps accelerating, the next debate may not be who wins the chips race — it may be who can actually pay for all the shiny new infrastructure.
Big picture: when a credit veteran starts waving the bubble flag, it’s usually worth at least peeking under the hood.