Bank of America predicts an ‘air pocket,’ not an AI bubble, fueled by mountains of debt piling up from the data center rush

Greg Abbott and Sundar Pichai sit next to each other at a red table. (Credit: Ron Jenkins—Getty Images)

It’s not the year 2000, and there is not an impending tech bubble, but that doesn’t mean investors shouldn’t be bracing for turbulence, Bank of America Global Research says. Savita Subramanian, BofA head of U.S. equity and quantitative strategy, has been arguing that compared with the dotcom era, today’s AI boom has supported earnings growth and smaller IPOs, and “speculation in unprofitable stocks is less extreme.” However, she warned, aggressive capital expenditures from hyperscalers are increasingly relying on debt, presenting danger for investors still eagerly awaiting returns.

“Is this 2000? Are we in a bubble? No,” Subramanian said during BofA’s outlook call on Tuesday. “Will AI continue unfettered in leadership? Also, no.”