Credit investors are increasingly channeling billions into artificial intelligence (AI), even as concerns emerge about a potential bubble. Major institutions like JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group are backing over $22 billion in loans for data center developments, reflecting the surging demand for AI infrastructure. OpenAI estimates trillions will be needed for future AI ventures, contributing to rising investor anxiety. Critics, including OpenAI’s CEO Sam Altman, see parallels with the late 1990s dot-com bubble, as 95% of generative AI projects fail to generate profit, raising sustainability concerns.
Most funding is now sourced from private credit markets, with estimates of around $50 billion quarterly investments, outpacing public market contributions. Analysts warn about the risks associated with long-term deals tied to uncertain AI cash flows. Despite rising caution, direct lenders remain eager, viewing AI infrastructure as a major future investment avenue.
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