Analysts are warning that the $3 trillion AI datacenter boom, while creating immense wealth for tech companies, could be introducing a “structural risk to the overall global economy.” The danger lies not with Big Tech’s spending, but with a $1.5 trillion “speculative” bubble being financed by risky debt.
The “healthy” part of the boom is the $750bn being spent by “hyperscalers” like Google and Microsoft, who have massive cash flows. The “unhealthy” part is the remaining $1.5tn of the projected $3tn spend, which must be financed by other means. This gap is being filled by “private credit,” a “shadow banking” sector that has regulators at the Bank of England on “alarm.”
Gil Luria, a technology research head at DA Davidson, warns that these lenders are so “eager to deploy capital into AI” that they “may not be properly assessing the risks.” They are funding “a new unproven category” of “speculative assets” that depreciate very quickly, often “without their own customers.”
This creates a dangerous financial cocktail. If these “lofty revenue expectations” for AI fail to materialize—a real possibility given an MIT study showing 95% of AI pilots have zero return—these speculative projects will default. Luria warns that if this debt “does rise to the level of hundreds of billions of dollars,” its collapse could trigger a financial crisis far beyond Silicon Valley.
While Nvidia’s $5tn valuation and Newport’s new Microsoft datacenter paint a picture of progress, the “exuberance” is financing a “shadow” boom. The $3tn question is whether this “speculative” debt will trigger a bust before the “healthy” investment can pay off.
