# Chamath Palihapitiya says AI borrowing could raise costs for everyone

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[News](https://realalpha.app/news/) · All-In

By [Rushabh Sheth](https://realalpha.app/news/authors/rushabh-sheth/) Oct. 31, 2026, 8:47 a.m. ET

Chamath Palihapitiya, who runs the investment firm Social Capital, said on the podcast All-In that the AI boom could push up borrowing costs. The episode was posted Friday.

This reaches well past tech. Mortgages, car loans and business loans all depend on interest rates. Palihapitiya said that if the government has to pay more to borrow, everything else in the economy pays more too.

He laid out two cases, starting at 46:42. In the first, AI companies pay more to borrow. That cost spreads to the firms that rent them computing power and raises the odds of defaults. In the second, the US government pays more to sell its bonds. Then borrowing gets pricier across the whole economy. Palihapitiya said these companies now make up 40 to 50% of capital market equity and debt flows. On buying AI stocks, he said this at 50:05.

"So many roads lead to downside risk, more than upside risk."

[Benzinga on MSN](https://www.msn.com/en-us/news/other/chamath-palihapitiya-warns-ai-boom-has-a-borrowing-problem-as-big-tech-debt-nears-400-billion-threatening-to-crowd-out-us-treasury-demand-the-entire-us-economy-is-levered-to-the-ai-complex/ar-AA2gsEVe) reported Saturday that Palihapitiya warned AI companies' debt has reached an estimated $340 billion to $400 billion. The story says that could crowd out demand for US Treasury bonds.

Palihapitiya also said he is generally bullish, and that there are versions where this all works out. He said he doesn't understand this kind of market risk because he has never seen it before.

Watch the 4 minutes where Palihapitiya explains the risk. [46:42](https://realalpha.app/v/p1Dy4e4ff0s/#t=2802)

## Sources

- The moment: [Anthropic S-1 Shocker, Greatest Business Ever? Google’s $500B Wipeout, Midterm Predictions](https://realalpha.app/s/ai-borrowing-could-create-risk-across-the-whole-economy/#t=3005), All-In, Oct. 30, 2026, from 46:42 to 51:05
- The story: [Chamath Palihapitiya warns AI boom has a borrowing problem as big tech debt nears $400 billion, threatening to crowd out US Treasury demand: The entire US economy is levered to ...](https://www.msn.com/en-us/news/other/chamath-palihapitiya-warns-ai-boom-has-a-borrowing-problem-as-big-tech-debt-nears-400-billion-threatening-to-crowd-out-us-treasury-demand-the-entire-us-economy-is-levered-to-the-ai-complex/ar-AA2gsEVe), Benzinga on MSN, by Mohd Haider, Oct. 30, 2026
- Earlier from Chamath Palihapitiya: [A small group of startups drives most AI spending](https://realalpha.app/s/a-small-group-of-startups-drives-most-ai-spending/), All-In, Oct 2026
- Earlier from Chamath Palihapitiya: [Agent liability may fall on users, except when the agent goes rogue](https://realalpha.app/s/agent-liability-may-fall-on-users-except-when-the-agent-goes/), All-In, Oct 2026
- Earlier from Chamath Palihapitiya: [Power shortages will constrain AI more than chips](https://realalpha.app/s/power-shortages-will-constrain-ai-more-than-chips/), Moonshots, Oct 2026

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