# AI borrowing could create risk across the whole economy Markdown copy of https://realalpha.app/s/ai-borrowing-could-create-risk-across-the-whole-economy/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy. - Speaker: [Chamath Palihapitiya](https://realalpha.app/people/chamath-palihapitiya/) (Host) · Founder & CEO, Social Capital · Led Facebook's growth team; his firm backed Slack and AI chipmaker Groq. - Host: [Jason Calacanis](https://realalpha.app/people/jason-calacanis/) · Founder & CEO, LAUNCH · Early Uber angel; sold Weblogs Inc. to AOL; hosts This Week in Startups. - Host: [David Sacks](https://realalpha.app/people/david-sacks/) · Co-founder & partner, Craft Ventures · PayPal's first COO, founded Yammer; White House AI & crypto czar 2025–26. - Host: [David Friedberg](https://realalpha.app/people/david-friedberg/) · CEO, Ohalo · Founded The Climate Corporation, sold to Monsanto for about $1.1B in 2013. - Show: All-In - Episode: [Anthropic S-1 Shocker, Greatest Business Ever? Google’s $500B Wipeout, Midterm Predictions](https://realalpha.app/v/p1Dy4e4ff0s/), Oct 30, 2026 - Moment: 46:42 to 51:05 of the episode (4 min), playing on https://realalpha.app/s/ai-borrowing-could-create-risk-across-the-whole-economy/; the episode from there: https://realalpha.app/v/p1Dy4e4ff0s/?t=2802 ## Quote > “The problem is we're trying to buy an AI stock. So many roads lead to downside risk, **more than upside risk**.” > — [Chamath Palihapitiya](https://realalpha.app/people/chamath-palihapitiya/) at [50:05](https://realalpha.app/v/p1Dy4e4ff0s/?t=3005) · All-In ## Takeaways 1. AI firms may compete with government debt for investors. 2. Higher Treasury yields could raise borrowing costs economy-wide. 3. Chamath sees systemic risk alongside the AI growth story. ## About this segment Chamath Palihapitiya explains how AI companies competing with Treasuries for capital could push up borrowing costs. Either AI firms or the wider economy could face higher rates, creating risks that are hard to isolate. From “Anthropic S-1 Shocker, Greatest Business Ever? Google’s $500B Wipeout, Midterm Predictions”, Oct 30, 2026. [Watch the full episode](https://realalpha.app/v/p1Dy4e4ff0s/) ## Transcript Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there. [46:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=2806) the IPO, or if you're going to buy the IPO, how would I decide to buy the IPO? And I think at the 1.4, 1.5, 1.6, it's kind of priced fairly. So there's no deal, but they're giving you an entry price into the future. So then you have to sort of have a view on the future. And I think there are two risks. The first risk was what I showed you on their revenue composition, which is how long does it take for Ant to show those 10,000 customers, the ROI math that they will need to move from less than a million, to single digit millions to 10s of millions, right? That's one very simple thing that you can check quarter after quarter after quarter, as those numbers swell. [47:33](https://realalpha.app/v/p1Dy4e4ff0s/?t=2853) The reason they will swell is that they'll have defensible use cases and white papers and analyses that make it very straightforward for a corporate infrastructure to sign off a multi person executive team to sign off on a multi million dollar spend. So that's an ant risk. And I think that you can price that risk. The second, though, is what I teased here, which is the risk you cannot price, which is this market risk. [48:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=2880) the AI complex has gotten so big that it now competes with US treasuries. Why is that an important thing to note? And why does that create market risk? Nick, if we just go back to the last chart, please. So when you look at this, what does it mean for treasuries having to compete with Facebook and SpaceX and Anthropic and OpenAI for money, well, it means that somebody is going to have to pay more. Now, let's play out one example. If it's the hyperscalers that have to pay more, because people believe the flight to quality and the durational risk of the government is better, then all of the money that the hyperscalers and the AI complex and anthropic and OpenAI have to raise will have to come in at a higher coupon. If that's true, then Friedberg's chart is also true, which is that those rates cascade through the ecosystem. The neoclouds will [49:04](https://realalpha.app/v/p1Dy4e4ff0s/?t=2944) have to pay more, all these other folks have to pay more. What that means is that you increase and you pull forward the risk of defaults, which we talked about last time. So you have this negative reflexive cycle there. Let's say the opposite is true. Let's say that the AI complex is able to raise money at reasonable rates, and it's the US Treasury that has to actually go through an auction and pay more. Now you have the broad-based cost of borrowing goes up because because every other part of the United States economy is levered to the twos through fives and 10-year complex. That is a huge market risk that I don't understand because I've never seen before. What is the market risk? Explain it just crisply here as we wrap. What is the market risk? [49:53](https://realalpha.app/v/p1Dy4e4ff0s/?t=2993) If interest rates go up because the US treasuries have to pay more for people to buy their bonds, then everything else in the economy has a higher cost of borrowing. That has negative implications. If the opposite is true, the AI complex has to pay more. And then there's a bunch of negative repercussions narrowly to the complex. The problem is we're trying to buy an AI stock. So many roads lead to downside risk, more than upside risk. [50:16](https://realalpha.app/v/p1Dy4e4ff0s/?t=3016) Now, there are versions in which this all works out and everything is off to the races. But I guess my structural takeaway, maybe, Jason, is we're entering this very weird phase in the US economy where we've seen this before and we're seeing it now. This complex is too big to fail. And I think when you start to see these guys representing 40, 50% of all capital market equity and debt flows, which then in turn represents 30, 35, 40% of all treasury issuance as well, that this competition happens, these guys are too big to fail, which means that there's a different problem at hand, which is a more systemic problem. [51:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=3060) So I'm not saying that there is. I'm generally bullish.