How much is artificial intelligence threatened by high interest rates and global debt?

Rising interest rates and soaring global debt are threatening the artificial intelligence (AI) boom, according to financial expert Ruchir Sharma. The chairman of Rockefeller International asserts that the belief a tech revolution can occur independently of economic principles echoes past market bubbles. High interest rates are now the most significant risk to the AI industry's growth.

Unlike in previous eras, global debt has reached unprecedented levels, forcing governments to vie with businesses for scarce capital. This competitive environment is limiting liquidity in the market. Developing AI infrastructure, such as data centers, demands colossal sums of money, pushing large technology firms to borrow more.

Industry analysts estimate that AI-related debt issuance will surpass $600 billion, a tenfold increase compared to 2024. The financial landscape has shifted substantially following a prolonged period of low-cost money, with investors now seeking higher returns, disproportionately affecting weaker companies in the AI value chain.

Sharma warns that major crises do not emerge abruptly; they often begin in vulnerable sectors before extending to the broader economy. While proponents argue that AI's momentum can overcome higher costs, investment in AI is not stimulating economic growth beyond this sector. Limited lending outside AI implies these companies may encounter challenges in expansion if their customers lack financial resources to utilize their services.