BlackRock, T.Rowe Price and Wilson Asset Management have all warned that as AI builders turn away from free cash flow and towards riskier funding sources for infrastructure, it could pour fuel on the fire.
Investment managers are warning the unfolding signs of an AI bubble could be worsening as companies start tapping riskier sources of funding for the technology amid a challenged global economy.
The concerns, raised by BlackRock, T.Rowe Price and Wilson Asset Management, have been sparked by the transition to private credit as a source of funding for the new tech as AI b…
BlackRock, T.Rowe Price and Wilson Asset Management have all warned that as AI builders turn away from free cash flow and towards riskier funding sources for infrastructure, it could pour fuel on the fire.
Investment managers are warning the unfolding signs of an AI bubble could be worsening as companies start tapping riskier sources of funding for the technology amid a challenged global economy.
The concerns, raised by BlackRock, T.Rowe Price and Wilson Asset Management, have been sparked by the transition to private credit as a source of funding for the new tech as AI builders move away from spending through free cash flow.
While fund managers spoken to by Capital Brief were reluctant to describe the current situation as a bubble right now, they broadly conceded the trend towards private credit is unlikely to slow down. Greater leverage is considered an inevitability, along with the need for private credit to step in, to drive AI development.
“The financing needs tied to AI capex far exceed what even the largest firms can meet internally. But this is occurring against a backdrop of already highly leveraged public sector balance sheets,” BlackRock’s 2026 Global Outlook said.