Robert Cohen said Wednesday that artificial intelligence debt will almost certainly reach bubble levels in credit markets [1].
The warning suggests that the rapid acceleration of borrowing to fund AI infrastructure and development could create a systemic financial risk. If these investments fail to generate expected returns, the resulting credit bubble could destabilize broader markets.
Cohen, the director of global developed credit at DoubleLine, said the remarks during a panel at the Bloomberg Global Credit Forum in New York [1]. He said that the current trajectory of AI-related borrowing is creating a precarious environment for lenders and investors.
"Artificial intelligence debt will almost certainly reach bubble levels," Cohen said [1].
While AI has driven significant growth in the technology sector, the shift of this speculative energy into the credit markets represents a new phase of risk. Cohen said that the scale of debt being issued to support AI initiatives is growing at a pace that may outstrip the underlying economic utility of the technology.
This development comes as financial institutions increasingly lend to companies seeking to integrate generative AI into their operations. The concentration of this debt within a single technological trend mirrors previous market cycles where rapid adoption led to over-leveraging, and subsequent corrections.
Cohen said at the forum on June 3, 2026 [1], highlighting the need for caution as credit markets absorb the massive capital requirements of the AI transition. The discussion focused on whether the current credit appetite is sustainable or if it is driven by a fear of missing out on the AI revolution.
“Artificial intelligence debt will almost certainly reach bubble levels.”
This warning indicates a shift in AI risk assessment from equity markets to credit markets. While stock prices often reflect optimism, a credit bubble implies that companies are borrowing beyond their means to fund AI growth. If these companies cannot service their debt because AI fails to deliver immediate profitability, it could trigger a wave of defaults that impacts the broader financial system.
