Jim Rickards is drawing a line from the AI boom straight back to 2008. The man who once got called in to help hash out an emergency bailout says Wall Street is doing the old trick again. Bundle up risky debt. Slap a nice label on it. Sell it off. Last time it was subprime mortgages. This time he’s calling it “subprime AI,” and the packages are landing in ordinary retirement accounts without anyone at the dinner table knowing they signed up for it.
His point isn’t that AI is fake. It’s that the money behind it is getting sliced and repackaged the same way the housing loans were, and the folks holding the bag at the end are the same folks who held it before. Regular savers. You can read his full argument here. Whether he’s right is another question. But we’ve seen this movie once already.
If you own a target-date fund or an S&P 500 index fund, you already own a slug of AI debt. The chipmakers, data-center builders, and cloud giants leaning on borrowed money to fund the buildout are baked into the same funds sitting in your 401(k), so a soured AI loan doesn’t stay on Wall Street’s books. It lands in yours.
Watch what happens if one of these data-center deals misses a payment. That’s the tell, same as 2007. And if the whole thing wobbles, the ones holding cash get to buy the wreckage cheap.
The tell isn’t the debt. It’s the packaging. When a data center loan gets sliced, rated, and dropped into a bond fund sitting in your 401(k), you own AI risk you never agreed to buy. Same trick as 2008, different acronym, and the people telling you it’s diversified are the same people collecting a fee to slice it.
Sources: globenewswire.com
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