AI-fueled leverage is increasing market risk, expert cautions
Yahoo Finance ·
STORY: "The concept of leverage in the economy as well as in the markets means that there's a lot of hope and excitement, and investors are really optimistic about what is to come," Rathbun explained. "And right now, that theme is AI." "What we're seeing here in the United States is not only a lot of capital going into AI related names, it's also AI-related companies taking out debt," she continued, noting how Nvidia and SpaceX each raised $25 billion in debt sales. "So if you put it all together, the amount of leverage that is actually going into the markets and specifically into AI is enormous," she added. "That could turn out to be really good if the investment turns out well. But it is a form of building risk into the markets and risk into the economy."
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