IMF warns $1.4tn in circular AI deals could deepen a market correction

The IMF flagged AI as one of three risks that could sharply tighten financial conditions in its Global Financial Stability Report. Across 14 disclosed deals since 2023, investors put about $300bn of equity and $650bn of debt into weaker AI firms in exchange for $1.4tn in future revenue commitments.

• IMF reviewed 14 public deals since 2023: $300bn equity and $650bn debt
• Investors secured $1.4tn in future revenue commitments in return
• $320bn of that debt sits with the firms receiving the money
• Hyperscalers now issue 10% of global investment-grade bonds, up from under 1% in 2024