The AI investment boom is entering a riskier phase, as Big Tech increasingly relies on external capital to fund surging costs — a shift that raises bubble risks, according to Greg Jensen, Co-CIO of Bridgewater Associates.
“There is a reasonable probability that we will soon find ourselves in a bubble,” Jensen wrote.
🔹 Why the Concern?
AI spending is now outpacing internal cash flows, pushing companies to tap outside investors to sustain expansion. If profits fail to materialise, the downside could be significant.
- AI data-centre & project financing hit $125B in 2025, up from $15B in 2024 (UBS)
- The build-out requires unprecedented physical infrastructure, facing constraints in power, land, and timelines
- Valuations across the AI ecosystem have surged, increasing concentration risk in the U.S. economy
🔹 What Triggered Fresh Anxiety?
Market nerves were reignited after Oracle issued weak sales and profit guidance, highlighting how quickly sentiment can turn when expectations are stretched.
🔹 The Bigger Picture
AI is already deeply embedded across the economy — but funding growth through leverage and external capital changes the risk profile materially.
The question investors are now asking is no longer whether AI is transformative — but whether today’s capital structure can withstand a slower-than-expected payoff.