PIMCO CEO Says AI Market Downturn Is Inevitable

The cost of building artificial intelligence infrastructure is straining global debt markets. Financial leaders in Hong Kong warned that the rapid expansion of AI is creating financial obligations that may eventually break the system. These comments came during the 2026 Global Financial Leaders’ Investment Summit.

Emmanuel Roman, chief executive of Pacific Investment Management Co, told attendees that a downturn in the AI market is inevitable. He described the current environment as a period where things are going to break. Roman noted that while the timing is uncertain, the economic evolution is unclear. His firm is deeply involved in AI financing, adding weight to his assessment.

Technology companies are issuing massive amounts of debt to fund their growth. Meta recently secured orders for $58 billion for a bond offering that will raise between $15 billion and $20 billion. Oracle said on Monday that it needs an additional $20 billion in bonds on top of its existing commitments. These moves place substantial pressure on debt markets.

Other major players are also tapping into the bond market. Alphabet is selling approximately $6.7 billion in bonds, which equals 6 billion euros. Microsoft, which had not sold bonds in ten years, recently issued $25 billion worth. This volume illustrates the scale of capital being deployed for AI development.

Roman estimates that the AI infrastructure buildout will require $2 trillion in financing over the next five years. The total US bond market is valued at approximately $12 trillion. This comparison shows the magnitude of debt being issued specifically for AI relative to the overall market.

PIMCO has a complex position in this market. The firm participated in the first chip-based financing for CoreWeave in 2023. Last year, PIMCO realized $2 billion in paper gains from $29 billion in Meta bonds issued for AI projects. It also purchased $4 billion in SpaceX bonds last month. The firm recently sold a portion of its AI debt while its CEO warns of a bubble.

Jim Zelter, president of Apollo Global Management, expressed similar uncertainty. He said that society will use more computing power and that AI capabilities are improving rapidly. However, he stressed that the long-term pricing and economics remain unknown. Apollo is currently in discussions with SpaceX regarding a potential $40 billion chip deal.

Market indicators send mixed signals. Strong demand for Meta’s bonds suggests enthusiasm has not peaked. Reports from China indicate that its AI bubble may have already burst. Wall Street banks are eager to finance $63 billion in debt for Anthropic, a company that is not a hyperscaler. Roman identified US interest rate hikes, geopolitical conflicts, or a eurozone crisis as potential triggers for a downturn. The outcome may depend on upcoming events, such as a potential initial public offering for Anthropic.