The latest xAI GPU SPV is 2/3 debt; maybe that's a trend or maybe not. The debt will be defaulted and the equity will be recapitalized to almost nothing. Same outcome.
Can you share some details about AI Debt Financing? In particular, who supplies the cash? I am thinking that commercial banks would not be able to supply all of this cash because of post-2008 regulations. Commercial banks may supply some cash but not all.
If debt is supplied by some pension funds or some sovereign wealth then the real economy would not be affected as much...
That is interesting because bubble debt is a lot more hazardous and more likely to cause a recession than bubble equity is, hence all the rules on lenders around Capital Adequacy, Liquidity, and Risk Management/Supervision for which no analog exists for equity investors.
