Wow, the Federal Reserve has listed AI as the number one risk to the US financial system! Just after the Democrats won Congress, the Federal Reserve has poured cold water on the AI boom. 87% of surveyed market institutions listed AI as a significant financial stability risk, compared to only 50% in May of this year. AI has surpassed asset price crashes, rising long-term interest rates, and cyberattacks to become the most frequently mentioned risk in the survey. By October of this year, debt issuance related to advanced computing infrastructure had exceeded $680 billion, approximately five times the total for 2023. The outstanding public debt exceeds $1.1 trillion, with unfulfilled lease and contractual guarantee commitments exceeding $3 trillion. Note: The Federal Reserve specifically highlighted the revolving financing model in the AI industry: Tech giants invest in AI companies, AI companies borrow money to build data centers and purchase GPUs, and chip manufacturers then support customer financing through investments and guarantees. During boom times, everyone makes money, but once AI revenue growth fails to keep pace with capital expenditures, stock prices, bonds, and private credit may all come under pressure. The Federal Reserve has even compared this construction boom to the telecommunications investment frenzy of the late 1990s.