If the AI ​​Bubble Bursts, the Global Economy Will Collapse

Jakarta, CNBC Indonesia – The International Monetary Fund (IMF) has issued its most serious warning to date. The boom in artificial intelligence investment, which is currently fueling economic growth, risks turning into a disaster.

If the anticipated returns fail to materialize, the market could collapse, and the resulting shockwaves would ripple throughout the global economy, as reported on Tuesday (October 20, 2026).

Billions of dollars have been poured into building data centers, purchasing chips, and developing AI models. Yet, to date, the returns on this capital have not been commensurate with the amounts invested.

The IMF warns that if investors were to suddenly grasp this reality all at once, the share prices of technology companies could plummet—and the repercussions would extend well beyond the stock market.

One of the triggers for this collapse is the mounting pile of debt. Operators of massive data centers are increasingly borrowing funds for expansion, while investors are also using leverage to invest in this sector. When the promised returns fail to materialize, the ability to service debt vanishes, potentially triggering a domino effect that could cause the interconnected financial system to collapse.

“Ballooning debt—or leverage—could serve as a catalyst for such a correction. Hyperscalers, the largest data center operators, are taking on ever-increasing amounts of debt. Meanwhile, investors are also using leverage to purchase AI-related stocks,” the IMF stated.

The financial ecosystem of the AI ​​industry essentially revolves among the players themselves. For instance, NVIDIA has committed billions of dollars in investment to OpenAI, while OpenAI, in turn, has become one of the largest purchasers of NVIDIA’s chips. Although the sums involved appear substantial, the capital is merely shifting from one pocket to another within the same closed circle. If one entity falters, the others are inevitably affected.

The IMF notes that since 2023, such transactions have encompassed hundreds of billions of dollars in investments and debt, underpinned by projections of future earnings many times greater in value. This deep interconnectedness means the financial health of these companies is inextricably linked; the collapse of one could potentially drag the others down with it.

The financial ecosystem of the AI ​​industry essentially revolves among the players themselves. For instance, NVIDIA has committed billions of dollars in investment to OpenAI, while OpenAI, in turn, has become one of the largest purchasers of NVIDIA’s chips. Although the sums involved appear substantial, the capital is merely shifting from one pocket to another within the same closed circle. If one entity falters, the others are inevitably affected.

The IMF notes that since 2023, such transactions have encompassed hundreds of billions of dollars in investments and debt, underpinned by projections of future earnings many times greater in value. This deep interconnectedness means the financial health of these companies is inextricably linked; the collapse of one could potentially drag the others down with it.

Beyond the risk of an investment bubble bursting, the IMF warns of other threats that could exacerbate the situation. Rising interest rates or government bond yields could further inflate the already high cost of debt. Furthermore, a large-scale, AI-enabled cyberattack targeting financial institutions or government bodies could trigger widespread chaos.

Signs of skepticism are beginning to emerge. Recently, it was reported that OpenAI’s annual revenue fell significantly short of its targets, dampening expectations that these companies will soon generate the level of profit they once promised.

SOURCE : CNBC INDONESIA