Washington think tank Open Markets Institute released a report, “Brace For Impact”, on a burning AI topic. In snippets of the report published by Futurism, authors say that the rapid expansion of the artificial intelligence sector is showing signs of a looming bubble whose collapse could escalate into a full‑blown crisis. The researchers think that the likelihood of a severe crash is rising quickly, and the situation resembles the eve of the 2008 mortgage crisis: speculative debt instruments used to finance energy‑hungry data centers are being repackaged and sold to pension funds, endowments, and institutional investors, exposing citizens’ savings to massive risk.
The industry’s key vulnerability is the widening gap between revenues and costs: the income of leading labs and tech giants bears little relation to the trillion‑dollar capital expenditures on infrastructure and computing capacity. Corporations are rapidly piling on leverage against this backdrop. The risk is compounded by the political context: Trump’s administration and relevant regulators are effectively rolling back oversight and turning a blind eye to threats, incentivising market overheating through subsidies. If companies fail to service their debts, inevitable defaults could trigger a domino effect far beyond Silicon Valley and hit the banking system.
Open Markets’ experts urge Congress, federal agencies, and state authorities to take urgent preventive measures. The analysts call for bringing opaque AI financing schemes into the light, ending the industry’s subsidy‑led pumping, and restricting access to risky tech derivatives for pension assets to protect financial‑system stability.