Economist Steve Keen Warns AI Debt Boom Could Burst Within a Year

Companies are borrowing heavily to finance artificial-intelligence data centers, servers and chips, betting that demand for generative AI will eventually produce enough revenue to justify the spending. The strategy faces pressure from elevated financing costs and the rapid depreciation of increasingly expensive hardware, raising doubts over whether AI infrastructure can generate sufficient cash flow before equipment becomes obsolete.

Economist Steve Keen warned that the debt-fueled AI boom may have only about a year left, arguing that the technology’s economic payoff could prove weaker than investing in pickleball courts. If revenue fails to cover interest payments and replacement costs, corporate defaults and bankruptcies could emerge within the next 12 months. The cited report did not identify individual borrowers or provide an aggregate financing figure.