Monetary Matters with Jack Farley Is The AI Bubble Popping? | Jack and Max on Data Center Debt, Fragile Markets, and Insurance Companies
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Nov 21, 2025 Jack and Max dive into the potential popping of the AI bubble, discussing rising debt fueled by heavy bond issuance for AI development. They explore the struggles of major players like Oracle and specialized compute providers like CoreWeave. The duo highlights the resilience of the insurance sector, focusing on Kinsale's underwriting success and Palomar's unique earthquake niche. Lastly, they touch on the troubling state of Chinese fintech, underscoring regulatory challenges and personal investment losses.
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AI Capex Is Being Debt-Financed
- Big tech's AI capex boom is shifting from cash-funded to debt-funded at scale.
- That shift raises questions about long-term sustainability and credit-market risk.
Credit Markets Signal Unease
- Credit markets are signaling concern even for investment-grade tech via widening CDS spreads.
- Widening CDS reflects hedging and rising perceived default risk for large AI-exposed names like Oracle.
CEOs Favor Growth Over Near-Term Profits
- Tech CEOs prioritize scaling AI over short-term cashflow metrics, accepting possible near-term impairment.
- If credit tightens, markets — not CEOs — may force a stop to the spending spree.