# Yesterday's Alarmism is Tomorrow's Consensus > Source: > Published: 2026-07-29 11:30:00+00:00 A couple of years ago, skepticism about the AI boom was something of a fringe position. Today... not so much. From [FT Alphaville](https://ftav.substack.com/p/this-is-nuts-whens-the-crash) [love that last line]: Over at Jefferies, head of equity strategy Chris Wood has for some time been offering clients a sum of all fears in one simple, easily ignorable package. His latest outlines his expectation of “massive capital destruction”, as token parsimony replaces tokenmaxxing, and as Chinese open-source models divert spending away from the US majors. It also covers default risk on hyperscaler debt, a lot of which is sitting off-balance-sheet via data centre lease commitments, and the artificial earnings boom from non-cash unrealised gains in investments, compute sales being recognised upfront, and depreciation costs being kept unrealistically low. On top of all that, Wood cites a [viral blog from earlier this month]about how commitments from hyperscaler tenants like OpenAI should be viewed as liabilities because all they’ll ever do is refinance, not repay:There is a potential “2008 real estate” analogy in AI infrastructure. Hyperscalers and neo-clouds have built data centers based on promises of future compute purchases, creating a credit-like structure tied to tenants whose long-term profitability is uncertain. It might not be a complete surprise to know that Ed Zitron, the [hyper-online unofficial voice of big-tech antipathy], was a recent guest speaker at Jefferies’ offices; the biggest difference between his body of work and the above summary is in the profanity count. And more recently: [Fitch Ratings-New York-27 July 2026]: The global credit risk environment has evolved heading into 2H26 but continues to be driven by two main sources of short-term risk, according to Fitch Ratings: rising vulnerability to an AI-related market correction and persistent geopolitical uncertainty in the Middle East. This is on top of a broader context of slowing[US consumer momentum], high inflation risks stemming from the 2Q energy shock and[structural public finance pressures]limiting the ability to respond to risk events. The scale of the AI investment boom and the accelerated global technology cycle has been a significant driver of US equity market valuations and corporate bond issuance over the past year. The effects on real economic indicators are profound. The 18% yoy rise in IT capital investment directly added 1.4pp to 1Q26 GDP growth. The wealth effect from AI-related investor optimism and equity market gains has also been a meaningful support for US consumer spending growth, which has been broadly slowing. That said, the medium- and long-term potential of the underlying technology is highly uncertain, as with previous tech cycles. The combination of revenue uncertainty and the extent to which capital markets and economies have become intertwined with AI have created a vulnerability for credit in the event of a re-evaluation of long-run returns potential. Very short-term spikes in market volatility for individual equities and tech-heavy stock indices have already occurred, but a larger, more protracted correction could have wider market, macro and credit effects depending on its scale, duration and contagion.