Bloodbath in the market: Yup, it’s been a slow moving train wreck for the past half year or so. The techies were borrowing their last dimes to invest in AI related stuff, data centers, chip makers, etc. It took awhile to realize they really didn’t have markets for all the stuff they were spending on. I watched nearly all of them get prices pumped up with P/E ratios going beezerk. For my own part I stayed out of it, sticking with my regular dividend payers, which have held their own. It’s normal for the market to take a dip in the fall, and that happened, but these guys got way too big for their britches and the damage is happening mostly in that techie group. Especially bad timing for them with the election showing a lot of folks don’t really like all the data centers. If you keep a few bucks handy you might soon get a chance to buy a really big building with nothing in it for cheap?
From - The AI Investment Bubble: Depreciation, Revenue, and the Diffusion of Risk (Philip Huffman at Huffman Writes)
“That debt is not, for the most part, sitting on the books of traditional, regulated banks. It has been originated and held by private credit funds (chiefly Blackstone, Blue Owl Capital, Apollo, Pimco, and BlackRock), which deployed more than $15 billion into GPU and data-center debt in a single month early in 2026, part of a wave that Morgan Stanley projects will reach $250 billion to $300 billion in hyperscaler-adjacent debt issuance for the year (Abasiita, 2026). Private credit funds source much of their own capital from institutional investors seeking stable, long-duration yield: pension funds and insurers prominent among them. One July 2026 analysis put the connection plainly in its headline: this circular chain of financing “puts pension funds at risk” (Tech Times, 2026). It is a chain in which the ultimate capital sits several steps removed from any decision about whether a given data center, or a given generation of chips, was ever going to generate enough revenue to pay for itself.
A second, more diffuse channel runs through public equity markets rather than private debt. The seven companies commonly grouped as the “Magnificent Seven” (Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta, and Tesla) accounted for roughly 34 percent of the entire S&P 500 by weight as of mid-2026, a concentration without precedent in the index’s modern history (Brock, 2025). In January 2026, JPMorgan strategists warned that this concentration had created what they termed a “fragile fifty percent”: a structure in which a single earnings disappointment or shift in sentiment toward the handful of companies most exposed to AI capital spending could trigger a broader de-leveraging event, dragging down an index regardless of the underlying health of its other 493 constituent companies (MarketMinute, 2026). Anyone holding a standard S&P 500 index fund in a retirement account (which is to say, a very large share of American households) carries that concentration by default, without having made any deliberate decision about artificial intelligence at all.”