> "they can't all default at once!"

Narrator: As it turns out, they can.

The difference now is instead of banks holding the risk, they are now the safest portion of the loans. The risk is now moved to private credit, so if this bubble bursts, they will panic sell other assets to cover the AI losses, which will crash unrelated sectors as well.

Since the now bad AI loans can't be sold, they need liquidity form elsewhere to cover. AI bursting means other S&P 500 stocks, treasuries, gold, crypto, commercial real estate will all go down with it.