TS Lombard Models AI Crash Erasing $20 Trillion
TS Lombard predicts a potential AI investment crash that could erase $20 trillion in market value and trigger a mild U.S. recession.
Financial firm TS Lombard released a report modeling a potential collapse of the artificial intelligence investment boom, predicting a scenario where U.S. stocks fall by at least 30%. The firm estimates that such a crash would erase approximately $20 trillion in market value, with tech stocks specifically dropping 40% and AI-related debt losses ranging between $125 billion and $190 billion.
Managing Director Dario Perkins identified AI cloud providers CoreWeave and Oracle, along with model developers OpenAI and Anthropic, as the weakest links in the sector due to precarious financing structures. Despite these projections, the firm expects only a mild U.S. recession similar to those in 1990 or 2001, noting that healthy private-sector balance sheets and the Federal Reserve's ability to cut interest rates would mitigate the damage.
TS Lombard advises investors to maintain diversified global stock portfolios rather than betting against technology too early. The firm projects a market reversal by early 2028.
