Robert Cohen said that artificial intelligence debt will almost certainly reach bubble levels eventually during a panel this week [1].
The warning highlights a growing concern among financial experts that the rapid accumulation of debt to fund AI infrastructure may outpace the actual economic returns generated by the technology.
Speaking Wednesday at the Bloomberg Global Credit Forum in New York, Cohen, who serves as the director of global developed credit at DoubleLine, said that an AI bubble is coming to credit markets [1]. He based this projection on historical patterns of heavy investment in transformative technologies, such as railroads and the internet, which he said later turned into bubbles [1, 2].
Cohen said that there are high odds of an AI bubble in credit markets [2]. His perspective suggests that while the technology is revolutionary, the financial mechanisms used to scale it often lead to overvaluation and eventual correction.
However, not all industry analysts agree with this assessment. Robert Schiffman of Bloomberg Intelligence challenged the notion of a current crisis during a video interview on Friday [3].
"There is no AI bubble," Schiffman said [3].
The disagreement between the two analysts underscores the volatility of current market sentiment regarding AI. While Cohen views the trajectory as a predictable cycle of boom and bust, Schiffman views the current investment levels as justified by the utility of the technology [3].
Cohen's remarks come as global firms continue to borrow heavily to secure the computing power and hardware necessary to maintain a competitive edge in the AI race [1].
“"Artificial intelligence debt will almost certainly reach bubble levels eventually."”
This debate reflects a fundamental tension in the current economy: whether AI is a sustainable productivity engine or a speculative asset. If Cohen's prediction holds, the credit markets could face a systemic shock as debt becomes unsustainable. Conversely, if Schiffman is correct, the current investment phase is a necessary foundation for a new industrial era, and the fear of a bubble is premature.
