Private credit will be the pin that pricks the AI super bubble. When the semi's fall it will be a once in a lifetime epic fall, worse than 2008-09, worse than 2000
Demand destruction starts
Already happening:
Less driving
Fewer flights
Slower economic activity
This is how the system self-corrects when supply is constrained
New fabs take years, not months. Even with heavy investment from Intel and Samsung Electronics, supply growth may lag demand in high-performance chips. That gap is where shortages can develop.
The trade is crowded. When everyone is on the same side—especially in momentum-driven sectors like semis—small shifts in sentiment can trigger outsized pullbacks.
Many semiconductor names are trading well above historical multiples. Unless earnings keep accelerating at the same pace, multiples compress. That’s the most common form of gravity in bull cycles.
Everyone’s is confident in their projections and conclusions until they get punched in the face by real-world nonlinear dynamics and their model collapses.
Houston we got a problem, A rapid shock from artificial intelligence could trigger a sharp rise in defaults across the US credit market, UBS has warned, with the biggest hit landing in private credit.