PIMCO CEO warns AI spending spree could end in a downturn

PIMCO CEO Emmanuel Roman warned that the massive surge in AI-related investment could end in a market downturn, citing risks from rising borrowing costs and escalating geopolitical tensions. The caution comes as capital continues to pour into AI infrastructure and adjacent sectors, with the spending boom increasingly reliant on debt financing. Roman's warning matters because a slowdown in AI capex would ripple across equities, credit markets, and crypto assets that have benefited from the risk-on environment. Investors should watch for shifts in borrowing costs and geopolitical developments that could strain highly leveraged AI investments.