Moody's Chief Economist Sounds Alarm On AI Over-Investment, Soaring Debt — Says Risks Could Hit Credit Markets, Not Just Investors

Benzinga_recent_news12-02

As the race for artificial intelligence (AI) dominance accelerates, Moody's Analytics Chief Economist Mark Zandi is sounding the alarm on a growing financial risk that sets the current tech boom apart...

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That's not the case with the AI boom.”\nData shared by Zandi illustrates a dramatic ramp-up in borrowing by technology giants, including Microsoft Corp. (NASDAQ:MSFT), Meta Platforms Inc. (NASDAQ:META), Amazon.com Inc. (NASDAQ:AMZN), and Nvidia Corp. (NASDAQ:NVDA).\nThe chart reveals a steep climb in bond issuance in 2024 and 2025 compared to relatively modest levels in 2022 and 2023. This surge suggests that major players are leveraging their balance sheets to fund the voracious capital requirements of AI development.\nZandi also flagged “incestuous financial relationships” between major AI firms as an additional layer of risk.\nThe concern is that if the AI bubble bursts, the fallout won’t be contained to stock portfolios but could spill over into credit markets, potentially tightening lending conditions and hurting the broader economy in a way the 2000 crash did not.\nHere’s a list of some AI-linked investments for investors to consider.\nRead Next:\nDisclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.\nPhoto courtesy: Andrius Zemaitis / Shutterstock.com","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.12","shortVersion":"4.35.12","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2588038740","isCrawlerRequest":true}