High Interest Rates and Record Global Debt Pose Risks to the AI Boom

Analyst Ruchir Sharma of Rockefeller International argues that the artificial intelligence boom is subject to the same financial pressures that have driven past stock market bubbles. Historically high global debt levels are forcing governments and technology firms to compete for limited capital, tightening market liquidity. Tech giants are increasingly borrowing to fund costly infrastructure such as data centers, with AI-related debt issuance projected to exceed $600 billion, roughly tenfold the 2024 level. Sharma notes that rising borrowing costs and higher investor return demands could hit weaker companies hardest, as past crises typically began in vulnerable sectors before spreading. Meanwhile, the AI sector's gains are not lifting the wider economy, which could limit growth if customers lack the financial strength to use AI services.