eleconomista.com.ar
Artificial intelligence continues to be the great promise of the global economy. From Silicon Valley to Wall Street, the narrative has become irresistible: endless productivity, complete disruption, and an industrial revolution. But beneath the foam, the numbers are beginning to show a less glamorous picture: massive capital spending, strong financing, signs of saturation, and growing anxiety among the world’s major funds.
All of this should constitute a red flag for Javier Maile, who based a key part of his strategic bet on the idea that Argentina could become a hub for artificial intelligence at a time when the global cycle may be entering a danger zone.
Strongest signal: Funds think companies are spending too much. For the first time in nearly twenty years, a majority of global fund managers believe companies are overinvesting. It’s not just another opinion, it’s a historic shift in a poll that’s been running since 2005.
The reason is clear: the scale of spending on AI infrastructure is so large that many investors are beginning to doubt its sustainability.
The number circulating among analysts is shocking: the cumulative investment in AI projects – between large-scale companies and smaller companies – could exceed the equivalent of more than 10% of US GDP by 2029.
Never before has a technology boom required such a large amount of capital in such a short time. “AI – or rather the promise of AI – is today the main driver of both the US economy and the stock market,” said Niall Ferguson, an economist who recently met Miley at Casa Rosada. “Between one-fifths of last year’s GDP growth can be explained by investments in computing and communications equipment, including chips and data centers, improvements in the electrical grid, and artificial intelligence software.”
The race to dominate generative AI is being funded by something that is starting to worry the market:
* Record debt issuance: More than $200 billion in bonds this year to support artificial intelligence projects.
* Private credit grows at the same rate.
* Financial circularity: Companies that sell infrastructure lend to the same customers who later buy computing power from them.
* Risk of CapEx exceeding cash flows supporting large technology.
For many funds, the issue is no longer just anecdotal. More than half already consider AI stocks to be in a bubble.
Nearly one in two see the “AI bubble” as the main risk to the global economy, higher than inflation or consumption in the United States.
Prices start to collapse
Although the Nasdaq is still trading near the highs, the atmosphere is starting to soften; The index fell by 4% during the month alone, and many companies on the periphery of the AI ecosystem collapsed by 30%, 40% or more.
The market was rocked by a symbolic move: Peter Thiel’s fund sold its entire position in Nvidia, the company identified as the “face” of the boom.
The big tech companies are still standing, but their surroundings – always the first sign – are showing cracks.
Why is this an immediate problem for Javier Maile? Because Miley bet big on the AI horse — a bet that was actually paying off, as evidenced by the OpenAI investment — just when that horse was starting to get tired.
If the AI cycle cools, capital expenditures will generally slow. Argentina needs large scale companies, big technology companies, and global funds to sustain — or accelerate — its investment plans.
But if the global market concludes that giant companies are spending too much, or that the return is uncertain for more than they are selling, the first thing companies do is downsize: fewer data centers; Fewer robots; less capital in emerging markets; Less geographical expansion; More focus on short-term profitability. Argentina is the most fragile end of that chain.
A country characterized by high risks, limited infrastructure and frequent fluctuations receives huge investments only when the global cycle is cheerful. If the party moderates, the dollars will fly to safer markets.
The narrative the government has built is based on the fact that the world is witnessing an unstoppable race in artificial intelligence. But if this race slows – even if it does not collapse – local projects will lose their immediate appeal.
Less investment → less skilled labor → fewer dollars → less growth. It’s a simple equation.
Because if there is a bubble and it bursts, the impact on emerging markets will be brutal, beyond AI. Here is the heart of the problem.
If the global market is afraid of the sustainability of the AI boom, major funds will do the same thing they always do: exit technology stocks; They rush to the closets; They rearrange investment portfolios and reduce emerging risks.
For Argentina this means: more country risk, less fiscal dollars, less bonds, less financing, and less appetite for any Argentine assets. Only when the government most needs to show overall improvement to attract capital.
If the AI cycle remains hot, Argentina could ride a historic wave, and there will be an appetite for risky assets, such as Argentine bonds. If it cools or explodes, the technological bet will diminish and capital will be redirected.
That’s why Gustavo Araujo of Criteria has just warned that this is not a simple problem.
For Araujo, Miley is giving clear signals that to fulfill his obligations he will prioritize access to the debt market over buying dollars to accumulate reserves. On this path, timing becomes key. “The need to return to the market is directly proportional to the time that passes: the more time passes, the more urgent it becomes,” he said. “Today, for example, El Salvador pays an interest rate of 5%: that is the case now,” he added. The pressing requirements for access to the debt market are linked not only to the domestic context in which the government can maximize the political advantage from its recent electoral victory, but also to a favorable international scenario that risks changing direction in the medium term.
“As for the question of whether there is a market bubble driven by technology and AI companies, I think in many ways it looks like that,” said Nicholas Max, director of asset management at Criteria. “They always say that bubbles are easy to spot, but difficult to know when they will burst.”
Alert level rises: Market is cheerful… but fearful
There is one piece of information that sums up the current climate better than anything else: global funds have reduced their cash positions to 3.7% of their portfolios, according to a Bank of America report cited by the Financial Times, a level that has historically been associated with market declines and sovereign bond rises in the following three months.
It is the classic indicator that indicates that the market has completely run. When the market is being played, any spark can start a fire.
It can transform industries, countries and production systems. But the financial cycle is not linear. It can move quickly, slow down, correct, collapse or reorganize.
Today, the data shows: record spending, rising debt, doubts about the sustainability of the boom, strong first sales, and a market that is beginning to imagine a less perfect scenario.
For Javier Miley, this is a risk that must be taken into account. Because your global listing plan depends on this party continuing.