A couple of days ago, we warned that America is about to cross $40 trillion in national debt while interest costs climb, the job market weakens and American households get squeezed from every direction. That problem has not gone anywhere. In fact, there is another piece of this economy that should probably be getting a hell of a lot more attention: an enormous artificial intelligence spending boom that is becoming increasingly important to both Wall Street and the broader U.S. economy.
The scary part is not that AI is fake. Artificial intelligence is obviously real technology, companies are using it, and some of what is being built will probably be around for decades.
The scary part is the financial machine being constructed around it.
Hundreds of billions of dollars are flowing into GPUs, data centers, electrical infrastructure, cloud computing and the handful of companies sitting at the center of the AI boom. Nvidia is selling the chips. Microsoft, Amazon and Google are selling the computing power. OpenAI and Anthropic are buying enormous quantities of that computing power. Wall Street is now being brought in to finance even more of it.
And increasingly, the companies benefiting from the spending are also helping finance the customers doing the spending.
That should get your attention.
The Whole Thing Depends on the Spending Never Stopping
AI critic Ed Zitron has been hammering on this issue for months, and his latest warning is about as subtle as a brick through a window:
“The moment they stop spending, they crash the market.”
Zitron’s argument is that OpenAI and Anthropic have effectively become load-bearing customers for enormous portions of the AI economy. His analysis, using estimates from Barclays, UBS and Wells Fargo, argues that these two companies may account for roughly 70 percent or more of AI-related revenue at some of the largest cloud providers. His larger point is that what Wall Street is treating as broad, exploding demand for artificial intelligence may actually be heavily concentrated in a couple of companies burning staggering amounts of investor money on computing capacity.
You don’t have to agree with every one of Zitron’s conclusions to see why the setup deserves scrutiny.
If Walmart made most of its money selling products to two customers, and those customers were financing their purchases with money supplied by Walmart and Walmart’s business partners, you would probably want to take a closer look at the books.
Yet something increasingly similar is happening inside the AI boom.
Nvidia Is Now Helping Finance the People Buying Nvidia Chips
The Wall Street Journal reported this week that Nvidia has struck agreements with Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs and KKR to create what are being called “compute financing platforms.” The goal is to deploy more than $500 billion of outside capital to help companies finance AI computing infrastructure.
Why is that necessary?
Because, according to another Journal report, many of Nvidia’s customers simply cannot afford the massive quantity of chips and computing infrastructure required to keep this boom growing at its current pace. The solution is essentially to turn AI hardware into a financeable asset class, allowing investors to lend against equipment while Nvidia itself takes on some of the risk.
Think about how crazy that progression is.
First, everybody desperately needs the chips.
Then the chips become so expensive that some customers cannot afford them.
Then the company selling the chips helps create a financing system so customers can continue buying the chips.
That doesn’t automatically mean the whole thing is a scam or that AI is about to collapse. Car companies finance vehicles. Equipment manufacturers help customers finance machinery. Vendor financing has existed forever.
But when the continuation of an investment boom starts requiring increasingly creative ways to lend people money so they can keep buying the thing responsible for the boom, you should at least start asking what happens when everybody finally reaches their borrowing limit.
Because that is where things can get ugly.
And Nvidia Just Cut Its Exposure to One Monster OpenAI Deal
There was another interesting development this week.
Nvidia and OpenAI have been working on financing a gigantic data-center campus in Ohio. The original structure reportedly involved Nvidia providing roughly a $250 billion financial backstop connected to the project.
That number has now been cut dramatically.
The Wall Street Journal reported that Nvidia’s proposed guarantee has been reduced from around $250 billion to less than $120 billion for the first phase, specifically because of investor concerns over how much financial risk Nvidia was taking on while simultaneously trying to support demand for its own chips.
Read that again.
Investors became worried that the company making the chips was taking on too much risk guaranteeing financing connected to the massive projects that create demand for those chips.
At the same time, Nvidia is helping Wall Street build a $500 billion financing machine designed to keep AI infrastructure spending moving.
Maybe all of this works beautifully. Maybe demand grows into the infrastructure, AI becomes embedded into every major business on earth, and these data centers end up looking like railroads or the electrical grid: insanely expensive to build but obvious in hindsight.
But preppers don’t build plans around the assumption that everything works beautifully.
We look at what happens if it doesn’t.
Now OpenAI Is Heading Toward an IPO While Executives Walk Out the Door
This would all be less interesting if the companies creating the demand were boring, mature businesses throwing off enormous amounts of excess cash.
OpenAI is not that company.
The company is reportedly preparing for what could eventually become a roughly $1 trillion public offering while undergoing a significant leadership shakeup. Axios reported Friday that OpenAI’s chief revenue officer Denise Dresser is leaving, former COO Brad Lightcap recently departed, and Fidji Simo, who had become the company’s number-two executive, stepped back last month. OpenAI has also experienced departures among people responsible for ethics, safety and alignment.
CNBC described the executive turnover as raising a “huge red flag” ahead of the expected IPO.
Again, executives leave companies. People burn out. Companies reorganize. None of that by itself means OpenAI is about to implode.
But the timing matters because OpenAI isn’t just another tech startup anymore.
Zitron’s argument is that OpenAI has become one of the pillars supporting the entire AI spending cycle. Quartz summarized his position last month: if OpenAI were unable to continue meeting its enormous compute commitments, the consequences could spread to companies that have built infrastructure, borrowed money and projected future revenue based on OpenAI continuing to spend.
That is the part people outside Wall Street should care about.
This Isn’t Just Some Silicon Valley Casino Anymore
If this were a bunch of venture capitalists setting their own money on fire, I wouldn’t lose much sleep over it.
That isn’t where we are anymore.
Goldman Sachs Research estimates that AI capital investment will reach roughly 1.8 percent of U.S. GDP in 2026 and could climb to 2.5 percent next year and 2.8 percent in 2028. Globally, AI investment is expected to exceed $1 trillion this year.
The Federal Reserve has also examined the issue and concluded that AI-related investment made a meaningful contribution to U.S. economic growth through the first quarter of 2026. Software, computer equipment and related investment have become significant enough that the AI buildout is showing up in the country’s actual GDP numbers.
That means the boom is now feeding construction jobs, electricians, cooling-equipment manufacturers, power companies, utilities, semiconductor manufacturers, real estate developers, engineering firms, cloud companies and financial institutions.
And then there is the stock market.
Microsoft, Alphabet, Amazon and Meta alone represent trillions of dollars in market capitalization, while Nvidia has become one of the most important companies in the entire market. Earlier this year Reuters noted that just four major hyperscalers represented roughly 17 percent of the S&P 500 while preparing to spend more than $600 billion on AI-related infrastructure during 2026.
That is why the question of AI profitability isn’t some nerd argument about whether ChatGPT writes good emails.
We have tied an enormous amount of economic activity and market wealth to the assumption that the spending keeps growing.
What Happens If Somebody Finally Blinks?
This is where the prepper part of this discussion begins.
Imagine OpenAI, Anthropic or one of the other gigantic AI buyers decides it has to seriously cut spending. Maybe investors stop writing blank checks. Maybe an IPO disappoints. Maybe cheaper Chinese models destroy pricing. Maybe AI companies discover that customers love the products but aren’t willing to pay enough to cover the astronomical cost of providing them. Maybe the technology succeeds but simply doesn’t generate profits fast enough to justify what was spent building it.
The first effect would probably be obvious: fewer GPU orders and less demand for new computing capacity.
Then Nvidia and other semiconductor companies suddenly face slower growth expectations. Data-center developers start delaying projects. Cloud companies lose one of their biggest sources of new demand. Utilities that planned massive power expansions have to reconsider assumptions. Contractors and equipment suppliers feel it next.
Then Wall Street begins repricing everything connected to the trade.
That is where the problem stops being an OpenAI problem.
If some of the largest stocks in America get hammered at the same time, index funds fall with them. Retirement accounts fall. Corporate confidence takes a hit. Companies that were hiring for the boom begin cutting payroll. Banks and private-credit funds start looking much harder at loans made against data centers and computing equipment.
And when people start asking who ultimately owns the debt, things can change very quickly.
Nobody can tell you whether that chain reaction happens next month, three years from now or never. Anyone giving you an exact date for a market crash is selling something.
But pretending there is no risk because “AI is the future” is equally stupid.
The internet was the future in 1999.
It still didn’t stop the Nasdaq from getting slaughtered when the dot-com bubble broke.
Wall Street Is Already Getting Nervous About the Returns
The problem is that while AI spending keeps climbing, evidence of huge productivity improvements throughout the rest of corporate America has been slower to appear.
Barron’s recently reported on analysis from Apollo chief economist Torsten Sløk showing that the biggest margin improvements since the launch of ChatGPT have been concentrated in technology and communications companies. Profit margins across much of the rest of the S&P 500 have not experienced the same AI-driven explosion investors have been promised. Sløk warned that the longer those returns take to materialize, the greater the downside risk becomes for an economy and stock market increasingly concentrated around the AI trade.
Meanwhile, the spending numbers keep getting bigger.
Reuters estimates Alphabet, Amazon, Meta, Microsoft and Oracle could collectively spend around $750 billion on data centers during 2026. Nvidia’s answer to customers struggling with those costs is now a financing system targeting another $500 billion in capital.
At some point, somebody has to make enough actual money from artificial intelligence to justify all of this.
Not revenue passed from one AI company to another.
Not investment money recycled into cloud contracts.
Not a company investing billions into a startup that then turns around and spends billions buying computing services from the company that invested in it.
Actual sustainable profits from actual outside customers.
That may happen.
But there is a hell of a lot of money riding on it.
This Is Why Economic Preparedness Matters Right Now
When we wrote about America’s approaching $40 trillion debt pile, our point wasn’t that everybody should empty their bank accounts, bury cash in Mason jars and start waiting for Mad Max.
The point was that economic preparedness gives you options when everyone else suddenly discovers the economy isn’t nearly as stable as they thought.
The same principle applies here.
You don’t have to predict whether the AI boom collapses. You need to build your household finances so being wrong about the economy doesn’t destroy you.
That means focusing on a few boring things that suddenly become extremely important when markets turn south:
- Build enough accessible emergency savings to survive a meaningful interruption in income. Three days of food won’t help much if the real disaster is a six-month job search.
- Attack high-interest and variable-rate debt while you still have the income to do it. Debt that feels manageable during good times becomes a chain around your neck after a layoff.
- Stop assuming your job is untouchable. The AI boom itself is already being used to justify workforce reductions, and an AI bust could create a completely different round of layoffs in technology, finance, construction and related industries.
- Keep building useful skills and additional sources of income. Financial redundancy matters for the same reason we preach redundancy in water, communications and power.
- Keep reasonable amounts of food, household necessities, medicine and other consumables on hand. Buying necessities ahead of time gives you one less expense to deal with during a financial emergency.
- Pay attention to credit markets, data-center cancellations, semiconductor orders and layoffs rather than obsessing over daily stock-market headlines. Those are the places where trouble would likely begin showing up before the average person realizes something has changed.
None of that requires predicting the end of civilization.
It requires recognizing that economies built on enormous amounts of debt and ever-increasing spending don’t give you much room for error.
We Now Have Two Enormous Spending Machines Running at the Same Time
That may be the bigger economic story.
Washington is approaching $40 trillion in debt and continues borrowing enormous amounts of money just to keep the federal machine operating. Corporate America is simultaneously pouring hundreds of billions into an AI infrastructure race that increasingly depends on financing, guarantees and expectations of gigantic future profits.
Neither one has to collapse tomorrow for you to have a problem.
All it takes is for investors to become a little less willing to finance the next round.
A few projects get postponed. Financing becomes more expensive. Stock valuations come down. Companies protect cash. Hiring freezes. Layoffs increase. Consumers pull back. Tax receipts weaken. Washington borrows more money to stimulate the economy. Interest costs climb further.
That is how financial problems feed on each other.
Maybe AI really does become the largest productivity revolution since electricity and all these gigantic investments eventually look cheap.
I hope it does.
But hope isn’t a preparedness strategy.
When some of the most powerful companies on earth are helping finance customers so those customers can continue buying hundreds of billions of dollars worth of their products, while Wall Street piles another layer of leverage on top, you don’t have to be an AI hater to wonder what happens when the music stops.
You just have to understand how bubbles work.
And if Ed Zitron is even partially right about one thing, it is this: the spending cannot keep accelerating forever.
The question is what is left standing when it finally slows down.
Are You Prepared for an Economic Collapse?
If you haven’t seriously looked at your economic preparedness plan, start with our complete guide to preparing for an economic collapse. We cover the warning signs, financial steps, survival supplies, self-reliance skills and preparations that can help protect your family during a prolonged economic crisis.
You should also read Surviving the Financial Storm: Essential Tips for Economic Hard Times and our February report, Economic Storm? Deficits, Bankruptcies, and the AI Revolution That Could Change Everything, for more on the financial and employment threats building beneath the surface.
Read the full article here
