Chamath Palihapitiya's Social Capital asks whether private credit funding the AI buildout is becoming a bubble
Context
Private lenders now fund a large share of AI data centers and chips, so stress in that market could spread losses well beyond the AI companies themselves.
Chamath Palihapitiya is the CEO of Social Capital, and the post is an X article promoting his firm's research report, so the framing is his firm's. Figures in it are attributed to UBS, PitchBook, S&P Global and the Bank for International Settlements, which were not each checked against the originals. It fits a week of concern over AI debt, including CoreWeave's bond yields in story 11.
Deep dive
On October 13, Chamath Palihapitiya published an X article titled Deep Dive: Is the AI buildout creating a private credit bubble? It says the AI buildout is increasingly funded by debt and that private credit plays a much bigger role than a year ago.
The article says that in the second quarter of 2026 Apollo and Blackstone led a $35 billion vehicle to buy chips and lease them to Anthropic, which UBS called the largest private credit deal on record, larger than the roughly $23 billion of loans direct lenders made to private equity backed US companies that quarter, by PitchBook's count. It cites S&P Global forecasts that six big spenders will invest about $870 billion this year and over $1.3 trillion in 2027.
It says direct loans to US borrowers grew from $96 billion in 2010 to $2.4 trillion in 2025. It cites a BIS finding that private loans to AI related companies carried an average spread of 6.2 percentage points over the base rate, versus 6.1 for other private credit, which the BIS said could mean lenders are underestimating AI risk.
The article points to mismatched terms, such as CoreWeave borrowing for five years against customer contracts averaging about three, and says major private credit funds paid out more in withdrawals than they raised in early 2026 for the first time.
What to expect next
Watch for signs of stress in AI linked private credit, such as falling prices on data center loans or more withdrawals from private credit funds, which the report flags.
Also watch whether regulators and banks respond to the rising share of AI spending funded by nonbank lenders, and how the next big AI financing deals are priced. The spread lenders charge AI borrowers is the key number.