PIMCO CEO warns of AI market downturn amid record bond sales

Emmanuel Roman, chief executive of Pacific Investment Management Co., told attendees at the 2026 Global Financial Leaders’ Investment Summit in Hong Kong that a downturn in the artificial intelligence market is coming and that things will eventually break. Roman spoke on Monday, a day when several of the world's largest technology companies announced new debt offerings to fund their continued expansion into AI infrastructure.

The comments from Roman drew attention because PIMCO has been a major player in financing the AI boom. The firm helped structure the first chip-based financing for CoreWeave in 2023. Last year, PIMCO recorded $2 billion in paper gains from $29 billion in Meta bonds issued to support AI buildout. The company also purchased $4 billion in SpaceX bonds last month. Roman estimated that the ongoing AI buildout could generate $2 trillion in financing needs over the next five years, a figure that represents a substantial portion of the total US bond market, which stands at approximately $12 trillion.

The market appetite for this debt remains strong despite Roman's warning. Meta attracted $58 billion in orders for a bond offering that Bloomberg reported will likely total between $15 billion and $20 billion. Oracle announced on Monday that it requires an additional $20 billion in bonds, adding to its existing financial commitments. Alphabet, the parent company of Google, is selling €6 billion, or roughly $6.7 billion, in bonds. Microsoft recently sold $25 billion in bonds, marking its first issuance in that category in a decade.

Other financial leaders are expressing similar caution. Jim Zelter, president of Apollo Global Management, told analysts on Tuesday that while society will likely use dramatically more computing power in the future, the pricing and economics of AI remain uncertain. Zelter noted that Apollo had recently discussed a potential $40 billion chip deal with SpaceX but that uncertainty persists. He said, "What we don't know is how pricing and economics will evolve."

Wall Street banks have been aggressive in financing AI startups. Reports indicate that banks were eager to finance $63 billion in debt for Anthropic, a company that is not yet a hyperscaler. Meanwhile, reports from China suggest that its domestic AI bubble may have already burst. These conflicting signals create a complex environment for investors trying to determine if the current spending spree is sustainable.

Roman identified several potential triggers for a market shift, including US interest rate hikes, war, or a crisis in the eurozone. The volume of interest in Meta's bonds suggests the market has not yet peaked, but the growing chorus of caution from major bond holders indicates a change in tone. The recent financial disaster at Situational Awareness has also contributed to a more guarded outlook among industry leaders.

The divergence in opinion is evident at the summit in Hong Kong. While some executives see the AI sector as entering a mature phase of growth, others view the current debt levels as a risk. Roman's prediction of a downturn stands in contrast to the immediate action taken by tech giants to raise capital. The next five years will test whether the market can absorb the projected $2 trillion in new financing needs without a major correction.