Why the AI Supercycle May Produce the Next Great Credit Event

For nearly three decades, investors have compartmentalized financial crises into distinct categories. The dot-com collapse was viewed as an equity bubble driven by unrealistic expectations surrounding transformative technology. The Global Financial Crisis was viewed as a banking and credit crisis caused by excessive leverage, opaque financial products, and a housing market built upon unstable foundations. While both episodes produced extraordinary losses, their origins were fundamentally different.

The next major market dislocation may not fit neatly into either historical framework. Instead, it could represent a hybrid of both, a technology-driven investment boom that ultimately transmits through the credit markets. In other words, 2000 causes with a 2008 transmission mechanism.