Eurodollar University The $25 TRILLION AI Bubble Is BURSTING
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Dec 15, 2025 Steve Van Metre, a macro and markets commentator, joins the discussion to analyze IBM's bold claim that AI spending may never yield returns. They delve into the funding risks tied to tech firms' negative cash flow and burgeoning debt, raising alarm bells about the AI bubble. The duo also tackles the disappointing performance from Broadcom and Oracle's risky debt strategy. They connect the dots between investor sentiment, the critical role of AI in the economy, and how wealth concentration could spell trouble for consumer spending.
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AI Buildout Faces Real Profitability Questions
- IBM's CEO openly questioned whether massive AI and data center spending will ever pay off, prompting broader market doubts.
- That doubt exposes the core risk: massive upfront capital and debt with uncertain long-term cash returns.
Watch Free Cash Flow, Not Just Hype
- Monitor companies' free cash flow closely because negative cash flow amid heavy CapEx signals funding stress.
- Prepare for potential equity issuance or credit limits if cash flow remains negative as financial conditions tighten.
From Equity Hype To Credit Vulnerability
- The AI enthusiasm behaved like a classic bubble: buy first, ask questions later, then scrutiny arrives as numbers balloon.
- That scrutiny shifts risk from equity froth to credit markets and the broader monetary system.