AI BUBBLE THREATENS TO UNRAVEL THE ENTIRE US ECONOMY

by New Rules [1-26-2026].

Moody’s, one of the world's "Big Three" credit rating agencies, paints a dire scenario: a 40% crash in inflated AI valuations would trigger a devastating financial contagion, hitting Main Street through three primary channels.

🔸First, the private credit market would freeze. Funds backing cash-burning AI startups would face defaults, forcing renegotiations and halting new lending. Investor redemptions would hit limits and suspend, trapping capital as collateral values plummet.

🔸Second, pension funds, heavily invested in AI tech via passive strategies, would be decimated, eroding public retirement savings. Concurrently, a market crash would create litigation risk for insurers and trigger a "wealth effect" reversal, causing consumers to slash spending.

🔸Finally, the spillover would infect banks providing leverage to private credit, despite limited direct exposure. The catalyst: A single weak earnings report from an AI giant or lost faith in labs like OpenAI generating real cash flow.

Giants like Microsoft emerge unscathed, poised to acquire failed startups at a discount. As a top CIO warns, "Hundreds of players... are not all going to be winners."