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**NOVEMBER 19, 2025**
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I wrote this [link removed] in kind of a fever after spending a long time talking to people and reading about what’s happening in our financial and tech markets. All year I’ve been noticing Silicon Valley fighting with Wall Street; but the thing they’re working together on, to finance a highly speculative AI boom, is much more consequential and terrifying.
**–David Dayen, executive editor**
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Center for Public Enterprise
The AI Bubble Is Bigger Than You Think [link removed]
One thing I’ve been tracking this year is the areas where Wall Street and Silicon Valley are going to war [link removed]. Tech firms clearly want to become banking apps and receive special charters [link removed], private equity and crypto are jostling for position in worker 401(k) plans, and the tech right in general wants to supplant big banks as the go-to director of conservative business policy.
That’s all still going on. But in one area, Silicon Valley and Wall Street are in sync: conjuring up sketchy credit deals that are pointing us toward another financial crash.
Last month, the big focus was “round-tripping [link removed],” the way that sundry AI and tech companies were investing in their own customers—with Nvidia giving AI companies the investment necessary to buy their graphics processing units (GPUs), and so on. But there’s a lot more to this story, tangled up with yet another rebrand by the former masters of the universe [link removed], from “shadow banks” without proper regulation into something boring and neutral-sounding: private credit. Ever since the advent of financial regulation, there have been companies that have attempted to evade the rules with creative branding. Private credit companies are non-banks that are trying to rebrand into a name that doesn’t tell everyone they are unregulated lending vehicles.
The speculative financing of the artificial intelligence buildout is happening mostly in private credit, where assets under management hit $1.6 trillion in February [link removed] and are likely higher today. The deals being made are perverse and irrational; there are huge mismatches between the life cycle of the assets being funded and the amount of time it will take to pay them off. Experts have been doing everything but picketing the stock exchange with signs that say “BUBBLE IN PROGRESS,” yet the country has so much sunk cost in the AI boom that the pathway feels inevitable. “We have sealed the deal on another financial crisis—the question is size,” said one former congressional staffer.
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