Subject: AI lending bubble
https://www.nytimes.com/2025/0...


What Wall Street Sees in the Data Center Boom

Data center capacity has become a barometer for both the health of the tech market and the risk of an A.I. bubble.

By Ian Frisch, The New York Times, Sept. 20, 2025

Trillions of dollars are flowing into the data centers needed to power artificial intelligence, and Wall Street is paying close attention….

U.S. data center demand, driven largely by A.I., could triple by 2030, according to McKinsey, which would require data centers to make nearly $7 trillion in investment to keep up….

The spending frenzy comes with a big default risk. According to Moody’s, structured finance has become a popular way to pay for new data center projects, with more than $9 billion of issuance in the commercial mortgage-backed security and asset-backed security markets during the first four months of 2025….

Even if A.I. proliferates, demand for processing power may not. The Chinese technology company DeepSeek has demonstrated that A.I. models can produce reliable outputs with less computing power. As A.I. companies make their models more efficient, data center demand could drop, making it much harder to turn investments in A.I. infrastructure into profit…. [end quote]

There’s more in the article about lost tax revenues, pressured power grids and water.

Here’s a really good article about the skeptical perspective.

https://pracap.com/global-cros...


Praetorian Capital – 20 Aug 25
Global Crossing Is Reborn...

I’ve been at this investing game a long time. Long enough to see cycles repeat themselves, cycles that I literally thought I would never again see. Yet in finance, everything repeats. You just need to keep your discipline and recognize things for...

[end quote]

What will happen to the big tech companies if AI doesn’t generate enough cash flow to pay off the debts?

Wendy