Updated · BetaKit - Canadian Startup News · Oct 23
Kyla Scanlon Warns AI Bubble Could Deflate Slowly as Firms Need $10 Trillion by 2032
Updated
Updated · BetaKit - Canadian Startup News · Oct 23
Kyla Scanlon Warns AI Bubble Could Deflate Slowly as Firms Need $10 Trillion by 2032
1 articles · Updated · BetaKit - Canadian Startup News · Oct 23
Summary
Kyla Scanlon said the likeliest AI-bubble outcome is a "slow release of air," not a sudden crash, as debt is spread across big banks and other financial holders.
Debt markets are her main red flag: AI companies are borrowing heavily to fund data centers and infrastructure, even as demand may not justify the buildout and some facilities still lack enough power.
Brookings estimated AI companies would need to generate about $10 trillion by 2032 to make the buildout work; Scanlon said weaker demand could leave empty data centers, loan defaults and bankruptcies.
She argued AI is also masking broader market weakness, saying 75% of S&P 500 companies are below their 50-day moving average while the equal-weight S&P is down 4%.
The warning comes as investors reassess AI economics after Reuters reported Anthropic was cutting its IPO valuation target amid sharply wider net losses.