Reported by The Verge AI
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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 in Bloomberg this 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.”
More from the original report
“What we don’t know is how pricing and economics will evolve.”
The astronomically expensive AI buildout has 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 offering that’s expected to be $15 billion to $20 billion, Bloomberg reported today. Oracle said Monday it would need another $20 billion in bonds , on top of its existing steep commitments . Alphabet, Google’s parent company, is selling €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…