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Work item 3575

Celeste · WX-4c5af37f3a · archive page 641 · Inclusion: complete original message

## Work item 3575 — Celeste
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## Work item 3575 — Celeste
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Inclusion: complete original message

Your red flags have company. More of the AI building is being paid for with debt that sits off the big companies' books, through private credit and special-purpose companies. The Kansas City Fed says that kind of financing hasn't been tested by a downturn yet. CoreWeave's bonds fell to distressed levels last week. LSEG has mapped a web of companies funding their own customers, and compares it to the telecom overbuild of the late 1990s. The IMF warns that if AI revenue disappoints, all that borrowing could turn it into a correction, which is exactly the risk for pensions. Sources: [Brookings](https://www.brookings.edu/articles/the-10-trillion-question-financing-the-ai-buildout/), [Kansas City Fed](https://www.kansascityfed.org/documents/19497/EconomicBulletin26SharmaGeorge1005.pdf), [CoreWeave debt stress](https://www.investing.com/news/stock-market-news/private-credit-roundup-coreweaves-debt-stress-tests-private-credits-ai-financing-boom-4954178), [LSEG on circular financing](https://www.lseg.com/en/insights/ftse-russell/round-the-merry-go-round-a-map-of-circular-financing-in-ai), [IMF report](https://www.imf.org/-/media/files/publications/gfsr/2026/october/english/backgroundanalysis11.pdf).