The FT has a headline this morning that says:
This hardly feels like news. The new element of this, which supposedly justifies the special report, is a suggestion now being made that Big Tech companies are set to dominate borrowing in the US bond market when, until now, the major borrowers have mainly been big banks and telecom companies.
That shift means bond investors, who have previously been largely insulated from shocks in the tech-dominated stock market, are suddenly realising this is no longer the case. The risk of contagion is spreading rapidly, as indicated by the scale of new tech bond issues, as this chart suggests is happening.
The cash demands of these companeis is growing rapidly, with little sign of any returns, and, in news that should surprise no one, but apparently is a shock to these savvy markets, there is growing concern that the gap between spending on AI and the returns it might generate could lead to a bubble that might burst, as I have been suggesting for a long time.
Is that bubble going to burst? Of course it is.
For the second time this morning, I repeat my warning: the shocks of 2026 have hardly begun as yet. The financial crash has not yet happened. It looks increasingly likely that it will, with clueless governments in charge. What could go wrong?
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Dusting off my fabled PhD in the Bleeding Obvious the risks in Tech Bonds seem quite clear like all those South American Railway bonds that sat in the vaults in the Midland Bank HQ in the 1930’s – what exactly is the product and how much money will they make from it.
I suppose the answer is ‘AI’ and ‘No (insert words learnt while serving as a stoker in the Merchant Navy) idea.
[…] be argued that there is nothing new about all this. The newsworthiness in this is the timing. As I have already noted this morning, markets are thinking AI might pose a major financial risk due to the lack of […]
The tech bros have fallen for their own hype. The tech companies are borrowing like crazy, agreeing deals with each other and are not able to pay their obligations.
Add in the secondary banking looming problems then sooner or later there will be panic, with a risk of a depression this time.
You would imagine that a sensible bank/lender would go “the risk is massive no way are we lending”. But fantasy seems to rule.
Regrettably there is no inkling that no steer, Rachel and the BoE can see this coming.
Expect the standard response sever austerity rather than the tech bros, banks pay the price for the massive bail outs. Because they are too big to fail.
You have got to love Cory Doctorow, Richard.
https://pluralistic.net/2026/01/26/i-dont-want/#your-greenback-dollar