William Lee warns AI boom driven by debt risks instability
Artificial intelligence is booming, but Chief Economist and Managing Director at Global Economic Advisors William Lee says there's a catch: much of this growth is being fueled by debt, which could make financial markets unstable.
He points out that a lot of artificial intelligence funding comes from private markets with variable rates, meaning things could get risky fast if elevated borrowing costs leave companies missing debt payments.
William Lee urges AI debt vigilance
Lee urges investors to keep an eye on how much companies are borrowing for artificial intelligence, especially with the Federal Reserve likely to raise interest rates soon.
He's concerned that more financially shaky companies are jumping into the artificial intelligence game, raising the risk of defaults.
In short: not all artificial intelligence bets are equal, so it pays to know who's actually solid and who's just riding the hype.