Credit investors are currently injecting billions into AI, prompting industry experts to question whether this influx is creating a bubble. Large loans, such as the $22 billion loan led by JPMorgan Chase and Mitsubishi UFJ Financial Group for data centres, and Meta's $29 billion secured for AI ventures, highlight the scale of investment.
Despite the substantial financial backing, concerns are rising about the sustainability of AI investments. OpenAI's CEO has drawn parallels to the dot-com bubble, cautioning against overvaluation. An MIT study indicated that a significant percentage of generative AI projects are not yielding profits, adding to the scepticism. While some believe the AI revolution is just beginning, others are urging caution, pointing to potential risks and the possibility of an unsustainable bubble.
Private credit markets are a major source of AI funding, with UBS reporting substantial quarterly financing. This continuous flow of funds suggests that, despite the risks, private lenders view AI as a crucial next-generation infrastructure asset.
