UBS strategists have warned that the artificial intelligence boom, fueled heavily by private credit firms and lenders, is raising the risk of overheating in the sector. Private credit, once focused on smaller businesses, has expanded rapidly into big tech, with tech-sector debt from non-bank lenders surging nearly 29%—or $100 billion—in the past year. 

The warning echoes concerns from OpenAI CEO Sam Altman, who recently cautioned that excitement around AI may be inflating a bubble. UBS noted that while this influx of capital could support hyperscaler growth plans, it may also create vulnerabilities if assets sour or growth slows. 

Tech giants including Meta, Amazon, Microsoft, and Alphabet are projected to spend $344 billion in 2025, much of it on AI-driven infrastructure such as data centers. 

Finsum: With private credit now deeply embedded in the sector, analysts caution that investors should carefully monitor risks alongside the sector’s breakneck growth.