AI Hype? Let’s Talk Money, Shall We?

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Right, so, everyone’s obsessed with AI, aren’t they? Like it’s going to solve all our problems, or, you know, steal all our jobs. Honestly, the sheer volume of breathless reporting is exhausting. But here’s a slightly less sensational take, courtesy of a survey by Bank of America. Turns out, the smart money isn’t panicking about robots taking over the world. They’re worried about a bubble. A bubble! Can you even imagine? All this excitement…and it might just be hot air.

Bloomberg’s been digging around, and apparently 23% of major credit investors surveyed by BofA are most concerned about an AI bubble. A measly 10% are losing sleep over the idea that AI will render us all obsolete. Which, let’s be real, is a relief. I mean, I’m perfectly capable of self-sabotage without the help of a super-intelligent algorithm, thank you very much.

So, why should you care? Well, these aren’t just random punters throwing darts at a stock chart. These are the people who actually lend money to companies. Pension funds, hedge funds, insurance companies – they’re experts at sniffing out risk. And right now, they’re smelling something…fragrant, but potentially explosive.

The big four AI players – Alphabet, Amazon, Meta, and Microsoft – are planning to spend a staggering $700 billion by 2026 on all the infrastructure needed for this AI revolution. That’s a lot of zeroes. And, for now, they’re mostly paying for it out of their own pockets. But…they’re starting to borrow more. A lot more. BofA reckons they’ll issue around $285 billion in debt this year – a 36% jump. Which, frankly, feels…ambitious. It’s like deciding to renovate the entire house while living in it, and taking out a second mortgage to do so. What could possibly go wrong?

The survey doesn’t name names, of course. They’re far too polite for that. But the fact that these credit investors are getting twitchy suggests they’re not entirely convinced all this borrowed money will deliver a decent return. It’s a polite way of saying, “This might be a bit of a con.” Which, honestly, wouldn’t be the first time. Would it?

So, What Do We Do With This Information?

If you’re starting to feel a bit uneasy about the whole thing – and you should be, frankly – maybe it’s time to diversify. Don’t put all your eggs in the AI basket. Consider some high-quality bonds, value stocks, or even international stocks. Or, and this is where it gets interesting, you could actually buy the dip on software stocks. Yes, software stocks. The ones everyone thinks AI is going to destroy.

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The iShares Expanded Tech-Software Sector ETF (IGV +2.60%) is down over 20% year-to-date. Ouch. Everyone’s convinced AI will make software obsolete. But what if they’re wrong? What if this sell-off is an overreaction? Driven by, dare I say it, hype? If those BofA investors are onto something, and AI fears are overblown, software stocks could actually rebound. And you, my friend, could look like a genius. Or at least, slightly less foolish. Honestly, in this market, that’s a win.

Look, I’m not saying AI isn’t going to change the world. It probably will. But let’s not pretend it’s a magic bullet. Or that everyone involved isn’t trying to make a quick buck. A little skepticism goes a long way. And a diversified portfolio? Well, that’s just common sense. Isn’t it?

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2026-03-05 18:13