TS Lombard models a $20 trillion wipeout if the AI boom cracks

TS Lombard has modeled a potential $20 trillion decline in equity markets if the AI investment boom unravels alongside a mild recession. The scenario lands at an awkward moment. Credit markets are already flashing warnings about some of the most indebted players in the AI buildout, and stocks tied to the trade just had a rough week. The skeptics are in the trade too TS Lombard economist Dario Perkins argues the debate on Wall Street has moved past whether AI is a bubble. In his telling, the conversation now centers on timing and severity: when the unwind arrives and how much it costs. “Even the AI sceptics are fully invested.” Last week offered a rough preview of what that could look like. Neoclouds, the specialist companies that rent out GPU computing power for AI workloads, shed a fifth of their value over five trading sessions. The Nasdaq, meanwhile, posted its worst week since Liberation Day. CoreWeave becomes the canary The sharpest stress showed up at CoreWeave, one of the most prominent neocloud operators. Its credit default swaps, which work like insurance policies that pay out if a borrower fails to repay its debt, priced roughly 63% odds of default. In mid-October 2026, C...