What happened
Glenn Beck is warning of a potential crisis related to artificial intelligence, specifically the massive amount of debt being taken on by companies investing in AI. According to Beck, the people building artificial intelligence are borrowing more money than anyone else in America, aside from the federal government.
Beck cites the example of SoftBank, which recently borrowed $11 billion in junk bonds with interest rates as high as 9.75%. He also notes that Oracle's interest bill for one quarter jumped 55% to $1.4 billion. Additionally, JP Morgan expects $4 trillion of AI debt to be issued between now and 2030, which is approximately a tenth of the national debt.
Beck expresses concern that this level of borrowing is unsustainable, especially as interest rates continue to rise. He compares it to building a dream house with an adjustable-rate mortgage, where the rate keeps increasing. He also mentions that one of the biggest data center landlords in the country, CoreWeave, has told its investors that every one-point rise in interest rates costs it an additional $30 million per year.
A recent report by Brookings estimated that the total cost of America's AI build-out between 2025 and 2032 will be $10.3 trillion. Beck questions what the debt and interest on this amount will be and notes that it is a massive bet that could have significant consequences if it fails.
