AI Debt Markets: PIMCO CEO Warns of Imminent Downturn

Pacific Investment Management Co. CEO Emmanuel Roman told investors at the 2026 Global Financial Leaders’ Investment Summit in Hong Kong that the artificial intelligence market is heading for a downturn.

Roman stated that a correction is coming and that conditions will deteriorate as a result. He noted that the industry faces $2 trillion in financing requirements over the next five years, a figure that represents roughly one-sixth of the total $12 trillion US bond market.

The warning emerged as major technology companies accelerated their borrowing to fund infrastructure. Meta attracted $58 billion in orders for a bond offering expected to raise between $15 billion and $20 billion. Oracle announced on Monday it would issue another $20 billion in bonds, adding to its existing obligations. Alphabet is selling €6 billion in debt, equivalent to approximately $6.7 billion, while Microsoft sold $25 billion in bonds, its first issuance in a decade.

PIMCO has played a central role in financing the AI boom. The firm participated in the first chip-based financing deal for CoreWeave in 2023. Last year, it recorded $2 billion in paper gains from $29 billion in Meta bonds. The company also purchased $4 billion in SpaceX bonds last month.

Roman’s comments carry weight because PIMCO recently reduced its exposure to AI-related debt. Other financial leaders are expressing similar caution. Jim Zelter, president of Apollo Global Management, told analysts that while computing power demand will rise, the economic model for AI remains uncertain. Apollo has been in talks with SpaceX regarding a $40 billion chip deal.

Wall Street banks recently arranged $63 billion in debt financing for Anthropic, a company that is not a hyperscaler. Reports from China indicate that its domestic AI bubble has already burst. These mixed signals create volatility in the market, with some executives divided on the timing of a potential crash.

Roman identified US interest rate hikes, war, or a eurozone crisis as potential triggers for the downturn. The market is no longer in a phase of unchecked growth. Anthropic’s upcoming initial public offering may provide a temporary lift, but the volume of new debt issuance suggests the sector is approaching capacity limits.

The next step is for these bond offerings to close and for the market to absorb the new supply. Investors will watch to see if the demand seen in Meta’s offering holds or if the caution expressed by Roman and Zelter leads to a pullback in pricing.