Moody's Analytics Chief Economist Mark Zandi issued a cautionary statement regarding the accelerating investment in artificial intelligence, highlighting a potential financial risk from massive corporate debt. Zandi noted that bond issuance by the top 10 AI companies is projected to reach a record $120 billion this year, creating a leverage problem that could pose a broader economic threat than previous market corrections. While acknowledging the long-term potential for AI to boost productivity, Zandi warned that the interim period is fraught with peril. He pointed to soaring AI stock prices that are already factoring in future optimism, alongside what he described as "massive (over) investments" in data centers and infrastructure. The warning suggests that these high levels of debt could impact credit markets, not just equity investors, if the boom turns sour.
Moody's Chief Economist Warns of AI Over-Investment and Soaring Corporate Debt
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