The Banks Aren't Holding The AI Financial Risk — The Public Is — We Had To React

The current AI boom relies on an unsustainable financial model characterized by circular capital flows and massive debt. Hyperscalers like Microsoft, Google, and Amazon provide the infrastructure and funding for unprofitable AI firms like OpenAI and Anthropic, which in turn funnel that capital back into the hyperscalers' cloud services. This cycle, combined with potentially dishonest hardware depreciation schedules, masks significant financial losses. Banks and private credit firms are offloading this speculative risk into the broader economy through complex instruments like collateralized loan obligations, mirroring the systemic vulnerabilities of the 2008 financial crisis. As these companies struggle to generate organic revenue, the reliance on continuous capital injections creates a precarious situation where a failure in the AI sector could trigger widespread economic instability, threatening pension funds and the retirement savings of the average investor.