PIMCO Chief Warns AI Bubble Will Burst Despite Bond Demand

Emmanuel Roman, chief executive of Pacific Investment Management Co, stated that a downturn in the artificial intelligence market is inevitable.

Roman made the assessment to attendees at the 2026 Global Financial Leaders’ Investment Summit in Hong Kong. He described the current period as one where things are going to break, though he noted that the precise timing and economic evolution remain uncertain. The comments come as technology companies issue record amounts of debt to fund their expansion.

Several major firms have recently tapped into the bond market. Meta secured orders for $58 billion for an offering expected to raise between $15 billion and $20 billion. Oracle indicated on Monday that it would require an additional $20 billion in bonds. Alphabet is selling approximately $6.7 billion in bonds, while Microsoft issued $25 billion worth, its first bond sale in a decade.

Roman estimated that the ongoing AI infrastructure buildout could generate $2 trillion in financing needs over the next five years. He compared this figure to the total value of the US bond market, which stands at approximately $12 trillion. This scale of issuance places substantial pressure on debt markets.

PIMCO has been a key financier in the sector. The firm participated in the first chip-based financing for CoreWeave in 2023. Last year, it realized $2 billion in paper gains from $29 billion in Meta bonds. Additionally, PIMCO purchased $4 billion in SpaceX bonds last month. The company recently sold a portion of its AI debt while its CEO warned of a bubble.

Jim Zelter, president of Apollo Global Management, also expressed uncertainty to analysts. He believes society will utilize significantly more computing power in the future and that AI capabilities are improving rapidly. However, he stressed that the long-term pricing and economics of the technology remain unknown. Apollo has recently been in discussions with SpaceX regarding a potential $40 billion chip deal.

Market indicators present conflicting signals. Strong demand for Meta's bonds suggests that market enthusiasm has not yet peaked. Reports from China indicate that its AI bubble may have already burst. Wall Street banks have been eager to finance $63 billion in debt for Anthropic. Roman identified potential triggers for a market shift as US interest rate hikes, geopolitical conflicts, or a crisis in the eurozone.