AI’s Giant Money Loop Is Drawing Foreign Cash Like 2008

A circular funding model is accelerating the AI boom, but also amplifying imbalances — reviving memories of the global financial crisis.

Investors and economists asking whether the artificial intelligence boom is being financed in the same unstable way that unraveled in the 2007-08 subprime crisis, and what happens if the promised profits are slow to arrive.

An AI boom creating massive demand for high-end chips and new pools of savings in places that make them like South Korea and Taiwan which are flowing to fund American tech companies and their $9 trillion AI build out.

In an October paper, economist Stijn Van Nieuwerburgh of the Columbia Business School calculated that by 2032 the cumulative investment in AI-related infrastructure would reach nearly $9 trillion, which would see it significantly outstrip the 19th century railroad boom as the largest capital expenditure spree in US history as a share of GDP.

Debts and obligations to finance that are piling up. Amazon.com Inc., Microsoft Corp., Alphabet Inc., Meta Platforms, and Oracle Corp. have collectively agreed to nearly $3 trillion dollars in leases, purchase commitments, and guarantees that don’t show up on the companies’ balance sheets.

The Big Take Bloomberg 12 October 2026

https://www.bloomberg.com/news/features/2026-10-12/how-the-ai-boom-is-fueling-global-financial-risks

On Thursday August 9 2007, financial markets suddenly seized up. 

Since I was running the Financial Times markets team, I spent two days frantically trying to identify the reason for the panic. Nobody knew. 

But that weekend I suddenly woke in the middle of the night with an image of a Spanish bin in my head. A month earlier I had attended a credit conference in Barcelona, where I read brochures about a little-known, and supposedly safe, entity known as a “structured investment vehicle”. 

The material had seemed achingly dull. So on the way home I tossed the papers into an airport bin — and forgot it.

Gillian Tett  Financial Times

https://englundmacro.blogspot.com/2026/10/gillian-tett-five-ways-to-tell-if.html