Major Wall Street financial institutions are increasingly expressing caution about the artificial intelligence sector’s viability, even as massive debt financing continues to fuel the buildout of AI infrastructure.
A report from the 2026 Global Financial Leaders’ Investment Summit in Hong Kong highlighted divisions among industry leaders regarding AI market risks. Emmanuel Roman, CEO of PIMCO, a major bond investment firm, publicly warned that a downturn in the AI market is coming “and then things are going to break,” though he acknowledged uncertainty about how pricing and economics will ultimately develop. Apollo Global Management similarly cautioned analysts about significant uncertainties in the sector, despite expectations that computing power usage will increase substantially.
Despite these warnings, debt financing for AI-related projects remains robust. Meta received $58 billion in orders for a bond offering between $15 billion and $20 billion, while Oracle announced plans for $20 billion in additional bonds. Alphabet is selling €6 billion in bonds, and Microsoft recently returned to the bond market for the first time in a decade with a $25 billion offering. Roman has estimated that the AI buildout could require $2 trillion in financing over the next five years, equivalent to roughly one-sixth of the entire US bond market.
PIMCO’s public warnings carry particular weight given the firm’s substantial involvement in AI financing, including early chip-based financing deals and significant paper gains from Meta bonds. The continued strong demand for AI debt offerings suggests the market has not yet peaked, though reports indicate China’s AI sector experienced a bubble burst. Potential market triggers identified by industry observers include US rate hikes, geopolitical conflicts, or eurozone crises that could shift investor sentiment.
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