AI's $5 Trillion Cost Needs Every Debt Market, JPMorgan Says (bloomberg.com)
- Reference: 0180048460
- News link: https://slashdot.org/story/25/11/11/1730232/ais-5-trillion-cost-needs-every-debt-market-jpmorgan-says
- Source link: https://www.bloomberg.com/news/articles/2025-11-10/ai-s-5-trillion-data-center-boom-will-dip-into-every-debt-market-jpmorgan-says
> "The question is not 'which market will finance the AI-boom?' Rather, the question is 'how will financings be structured to access every capital market?'" according to strategists led by Tarek Hamid.
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> Leveraged finance is primed to provide around $150 billion over the next half decade, they said. Even with funding from the investment-grade and high-yield bond markets, as well as up to $40 billion per year in data-center securitizations, it will still be insufficient to meet demand, the strategists added. Private credit and governments could help cover a remaining $1.4 trillion funding gap, the report estimates. The bank calculates an at least $5 trillion tab that could climb as high as $7 trillion, singlehandedly driving a reacceleration in growth in the bond and syndicated loan markets, the strategists wrote in a report Monday. The analysts project $300 billion in high-grade bonds going toward AI data centers next year. That could account for nearly one fifth of total issuance in that market, which a report from Barclays estimates will grow to $1.6 trillion.
[1] https://www.bloomberg.com/news/articles/2025-11-10/ai-s-5-trillion-data-center-boom-will-dip-into-every-debt-market-jpmorgan-says
Is anyone stopping to ask the non-obvious what if? (Score:3)
"Trillions? Wow -- What if we didn't need all of this infrastructure thanks to future advancements?" "Can these data centers be repurposed?"
If not, we're gonna have a lot of wasted resources go down the internet tubes.
Re: (Score:2)
> "Trillions? Wow -- What if we didn't need all of this infrastructure thanks to future advancements?" "Can these data centers be repurposed?"
Unless those "future advancements" include mining shitcoin at a quantum rate, yes. Yes they can.
Greed can always find a reason.
I can already smell the bank bailouts (Score:4, Informative)
This really requires a lot of faith. I can't blame people for having some but we're talking about putting all the eggs into one pretty speculative basket. I'd sure like to opt out of being impacted by this, if possible. If that means I "miss out," I am ok with that.
High grade? Not (Score:5, Insightful)
>> The analysts project $300 billion in high-grade bonds going toward AI data centers next year.
I'm not sure who is rating these bonds "high grade" because it's the worst investment around.
A strange inversion. (Score:5, Insightful)
It seems exceptionally weird that people have started writing as though "AI"'s needs are just axiomatic; and that the size of other things, like revenue or suckers with available capital, must be the problem.
The fact that you want something that costs more than you have isn't normally described as a 'funding gap'; it's just you having expensive tastes that you can't afford. Why are talking about there being X trillion in 'demand' when, in fact, there's only X trillion in unfunded hype because nobody has slapped a shock collar on Altman yet?
Re:A strange inversion. (Score:5, Insightful)
Exactly... if it's so damn valuable, why aren't they making money on the existing infrastructure? They're upscaling losses.
Re: (Score:2)
> It seems exceptionally weird that people have started writing as though "AI"'s needs are just axiomatic; and that the size of other things, like revenue or suckers with available capital, must be the problem. The fact that you want something that costs more than you have isn't normally described as a 'funding gap'; it's just you having expensive tastes that you can't afford. Why are talking about there being X trillion in 'demand' when, in fact, there's only X trillion in unfunded hype because nobody has slapped a shock collar on Altman yet?
It's become this weird catch-22 for society as a whole, and it's all built on speculative fiction. The true believers really push the narrative that computer god is coming, and that if computer god isn't "born" in the United States, some other country will "own" computer god. And the United States will be losers in the final battle for ... um, let me check my notes... who gets to put the final nail in humanity's coffin. Because, computer god will mean there is no longer any need for humans, and we should al
This doesn't look good (Score:2)
We're witnessing the greatest human invention that will drive a bunch of people insanely, otherworldly rich... Or the deepest hole that will drag entire populations down the drain.
Most of the world (and especially the US) is already under huge debt. At this point, this looks like going all in on Hail Mary.
Re: (Score:2)
> the greatest human invention that will drive a bunch of people insanely, otherworldly rich
I've created a simple guide for how to get rich with AI:
1. Sell bonds and other "investments" in AI.
2. Profit!
3. Run like mad when China makes a cheaper AI and the market collapses.
Re: (Score:2)
> We're witnessing the greatest human invention that will drive a bunch of people insanely, otherworldly rich... Or the deepest hole that will drag entire populations down the drain.
I thought the overall sales-pitch was both? A few people insanely, astronomically rich, the rest of us beyond destitute. Technology! Fuck yeah!
Crafting the largest financial disaster ... (Score:2)
... in human history requires ALL the money.
trillions (Score:2)
Trillions and trillions ... sounds like purposeful over-capitalization to me. Industry leaders want every aspect of American (world?) finance to have a dog in the hunt (for the money-bunny). Actions too big to fail and too widespread to ignore. And if that rabbit turns into a wolf ... and eats the dogs ... well there's always government bail-out.
Madness. (Score:2)
We'll look back in anger from our dirt floors and boiling shoe dinners while asking "How could we not have seen this coming?"
There goes the power bill (Score:3, Funny)
Damn, we should have upgraded fusion power on the tech tree first.
AI wants everything (Score:2)
After consuming last bit of the Internet, last watt of the grid, last GB of your VRAM, now AI wants the last dollar in you pocket.
Can you imagine what we could do (Score:5, Insightful)
If we spend $5 trillion dollars on new cities and houses and roads instead of replacing as many white collar workers as possible?
Remember folks the product here is not funny little videos. The product is replacing trillions of dollars worth of wages. The funny little videos are just there to get you to interact while they train up the AIs.
We are literally going to shift our entire civilization to one where a small group of people have their every need and want satisfied to the limits of human capacity while everyone else lives in abject poverty commonly associated with the worst of the American Indian reservations or parts of Africa.
That is at least the current plan. A return to feudalism. And I really don't see anything that stops it.
This isn't like when you lost your job at the buggy whip factory and went to work at the car factory. There is no car factory. It's entirely run by robots.
And as a added reminder 25% unemployment was enough to trigger two world wars. Yeah we don't have the same colonial militaries anymore like we did back then but we have a lot of economic colonialism that's going to break down. As it does countries will switch back to military imperialism to get what they want. Only this time we have nuclear weapons.
And the solution as always is very very (Score:1)
Obviously to spend $5 trillion dollars in walkable cities. It's designed to make you think you don't need to worry about climate change or demand things like public transportation and walkable cities. As an added bonus it gets nerds all excited and makes Elon Musk look like he's some visionary.
Like how the same people who freak out over 15 minutes walkable cities are completely okay with self-driving cars taking over everything. At least as long as they're from Tesla.
Basically there's no getting away from t
Re: (Score:1)
America can't have walkable cities because modern American cities are literally designed so the middle and upper class can get away from 'minorities'. That means suburbs which can only be reached by car.
The same is now increasingly true of much of Europe, where whites flee the already walkable parts of the city to get away from the millions of 'minorities' their governments have imported over the last twenty years.
Re: (Score:2)
EU here... Housing in the city is so expensive that minorities can't find a home there. Hope that helps.
Re: (Score:2)
> EU here... Housing in the city is so expensive that minorities can't find a home there. Hope that helps.
So they end up living in slums. Cities have slums we just don't like to think about them. Occasionally right wing media will talk about them because there's a lot of Filth and crime like you would expect when everybody is dirt poor and being abused. Although honestly they don't even really bother with that anymore because they found they can just make shit up about actual nice cities and right-wing idiots will believe literally anything.
I mean they had a guy on Fox News pretending to be antifa who literal
Re: (Score:3)
Mmmm, no, that's not how it works here. Socialist country... kind of keeps the slums away. Cheers!
Re: (Score:2)
US here... It's exactly the same in the US. My condo is valued at ~$1300/ft^2 (~$12k/m^2)
We have plenty of minorities, but they're the kind of minorities that the racists like- the well-off ones.
That being said, every city has some section that's "The Projects". I've been to European cities. They're not inherently different in feel than US cities.
I suspect parent has never been in an actual city.
Re: (Score:2)
Your messiah sounds like an idiot.
Spend it as you make it or gtfo. (Score:3)
Some start-up debt to get established? sure knock yourself out. But putting the entire planet's financials and infrastructure into heavy debt is JUST PLAIN STUPID.
Now every single market (Score:2)
will be effected when the bubble pops. This could get crazy and fast. If AGI promises don't go through then there will be a grade A hydrogen bomb dropping on the financial markets. Has anyone done a risk analysis? Nope because they are too worried about financial FOMO.
distributed workload (Score:2)
Gamer PCs can run inference on an open source LLM locally with good response time... As a society, we really only need datacenters for the model contruction (still an important issue). The idea that this infrastructure is necessary for end use is just corporate greed trying to prevent you learning the truth. If the world economy holds on another few years, our [new] laptops will have the right chips. The inference side of the game is going to fan out away from datacenters anyway.
Future stranded assets? (Score:2)
Eventually, someone is going to make cost effective, low power photonic chips that can replace the current crop of NPUs and GPUs. Then what happens when these things all become dinosaurs?
Every Bubble Pops (Score:5, Insightful)
Sometimes it is just a correction and the market for the [product/service] continues at a more realistic pace. Other times it is a full devaluation.
If we allow this to infect every capital market, it will take everything down when it falls.
Re: (Score:2)
You're spot-on..."...infect every capital market ...". No safe haven for the reasonable producer or investor.
Your SIG OTOH is dead wrong. Any prudent person would prefer Franco or Mussolini or Czar Peter to Stalin or Mao.
Re:Every Bubble Pops (Score:4, Interesting)
A third of the US stock market is in AI related business. The AI bubble pop will be more like an envelope collapse in a hot air balloon, ascending so quickly that you can't close the parachute and then you drop like a stone. The end point is at the bottom, there will be no soft landing. The middle class will be wiped out, and angry as hell that politicians and financial sectors allowed a massive depression to destroy our 401K retirement.
The ripple in the world economy will be staggering. The defaults on mortgages will wipe out the gains in residential real estate, the primary source of wealth for middle class Americans. Potentially a one-two punch with US bond and credit rating collapse, leading to unfavorable exchange rates making imports very expensive. But simultaneously with the US being out of the manufacturing business for decades, little infrastructure or expertise in modern efficient manufacturing techniques.
It's going to be very painful to watch my nation's decline, once an empire. And it's also going to be very frustrating to see my fellow Americans make excuses and live in denial about what is happening. We're going to be standing in a bread line together, joking about how at least we're not communists.
I don't think the energy bubble will pop (Score:3, Insightful)
There will be winners and losers but a lot of people are anticipating that when the winners come out on top there's going to be a huge amount of infrastructure that we get to take and use for things like heating and cooling our houses.
But those winners didn't go away and they are still going to be using those data centers to replace White collar jobs which is the entire point of this exercise.
That means we're not going to get all that free cheap electricity capacity. All we're going to get out of th
Re: (Score:1)
"I do still see a lot of thought terminating cliches though"
And your post is peppered with them.
Do try to engage in critical thinking. Not theory, real thought and discernment. Among other things, not every 40 hour a week job is misery, even if your entire life is.
Care to name them? (Score:2)
I would love for you to tell me what of my post represents a thought terminating cliche and for you to actually debunk anything in my post.
And I would love even better for you to explain a path forward for humanity that doesn't involve guys like you getting the shit all over people beneath you on the social ladder. I'm not going to bother pointing out again that you will be at the bottom because there is no way in hell your mental facilities could imagine or envision that happening. You are simply too a
Re: (Score:3)
> Sometimes it is just a correction and the market for the [product/service] continues at a more realistic pace. Other times it is a full devaluation.
> If we allow this to infect every capital market, it will take everything down when it falls.
I'm honestly beginning to believe that even the AI prophets know it's a bubble, and they're doing everything they can to tie it into absolutely every single aspect of the business world they can before that pop specifically so that they can get that sweet, sweet, "too big to fail" bailout and keep right on trucking even after the pop. Sure, it may destroy the entire economic system of the world, but think of the billionaires backing it. Think how much they stand to gain whether it succeeds or not? They eith
Re: (Score:3)
> If we allow this to infect every capital market, it will take everything down when it falls.
I expect that's the goal at this point: become "too big to fail" while promising an AI that solve world hunger, make everyone three inches taller, and get all the weeds out of your lawn after just another trillion are two. Along with a none-too-subtle, "if you won't bail us out, the Chinese will get to the Install Planetary Overlord version of AI first!" Then it just becomes another wealth transfer to billionaire-class.
Re: (Score:3)
I just asked ChatGPT "Is AI creating a market bubble? yes or no", it responded:
> It's not a clear-cut yes or no answer, but if I had to choose based on the current market trends and speculative investment behavior, I'd lean toward "yes, there are bubble-like conditions," but not necessarily a full-blown bubble yet.
Re: (Score:2)
The real answer entirely depends on if they succeed or not.
If they manage to build real, strong AI, then it won't be a bubble. If they manage to replace a significant amount of the workforce with automation, then it won't be a bubble. The LLMs have already proved useful in some areas, but probably not enough to justify the valuation.
If it's mostly vaporware, then that bubble will pop hard.