Financial Stability Risks from AI Capital Expenditure

The $700B+ AI infrastructure investment in 2026 creates financial stability risks through a 6-14x gap between capex and direct AI revenue, growing debt-financed construction ($200B+ in data center debt), free cash flow destruction at major tech companies (Alphabet FCF down 89%, Meta down ~90%), and structural parallels to the 1990s telecom bubble ($1.4T projected 2024-2026 vs $1.2T telecom inflation-adjusted). Risks could transmit to broader markets through index fund concentration, credit contagion, and semiconductor supply chain cascades.