Please stop asking me when the AI bubble will pop

I’m getting some real mixed messages here, boys! I’m getting some real mixed messages here, boys! People, including on this staff, keep asking me with varying degrees of excitement or trepidation when the AI bubble will burst. I’ll tell you what I tell them: If I knew that, I would make a life-changing bet on the market, levered up as far as I could, and then, after I made my money, go retire on a beach somewhere. Maybe run a cat sanctuary, who knows. What I can tell you is that I read with interest a story inBloombergthis morning: “Wall Street CEOs, Big Money Managers Divided Over AI Risks.” The story itself is a roundup of stuff said at the 2026 Global Financial Leaders’ Investment Summit in Hong Kong. Here’s what caught my attention: The CEO of Pacific Investment Management Co. — that’s PIMCO, the legendary bond firm — told listeners that there’s going to be a downturn in the AI market “and then things are going to break.” “What we don’t know is how pricing and economics will evolve.” Theastronomically expensiveAI buildouthas swamped debt markets— making it harder to raise cash. But there’s still more debt coming, and people still want to buy it. For instance,Meta drew $58 billion in orders for a bond offeringthat’s expected to be $15 billion to $20 billion,Bloombergreported today. Oracle said Monday it would needanother $20 billion in bonds, on top ofits existing steep commitments. Alphabet, Google’s parent company, isselling €6 billion(or about $6.7 billion) of bonds.Even Microsoft recently sold bonds, for the first time in a decade — $25 billion of them. The PIMCO CEO — his name is Emmanuel Roman, but his job is what matters here — has estimated that the AI buildout could create $2 trillion in financing needs over the next five years. The entire total US bond market is about $12 trillion. I am harping on PIMCO because it has been instrumental in the AI trade. It was among the group of financiers that did the firstCoreWeave chip-based financingin 2023. It made a quick$2 billion in paper gainsfrom$29 billion in Meta bonds, meant to support the AI buildout, last year. Itbought $4 billion of SpaceX bondslast month. If PIMCO’s CEO is publicly sounding the alarm about a bubble popping, that’s a big deal — especially sincethe company just sold a bunch of its AI debt. It’s not just PIMCO urging caution. Apollo Global Management,which lately had been talking with SpaceX about a $40 billion chip deal, is also warning of AI risk. Apollo president Jim Zelter told analysts today that while he expects society will use “dramatically more computing power in the future” and that AI is improving quickly, there is still significant uncertainty. “What we don’t know is how pricing and economics will evolve.” The sheer volume of interest on Meta’s bonds suggests we are not at the top of the market. But there have beenreports from China thatitsAI bubble burstsome time ago. Meanwhile Wall Street banks were tripping over themselves tofinance $63 billion in debt from Anthropic— not even a hyperscaler. This is what I mean when I say “I don’t know.” I do think, though, that something major — PIMCO’s Roman singled out US rate hikes, war, or a eurozone crisis as potential triggers — could flip this market. We’re not in go-go-go territory now. Maybe that will change; it’s possible Anthropic’s IPO will go blockbuster and it’ll be like when someone rolls up to a party that’s running low on beer with a 24-pack. But as more people are expressing caution — and particularlyafter the disaster at Situational Awareness— the best part of the party might be over. A free daily digest of the news that matters most. This is the title for the native ad