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Alan Waxman, CEO of Sixth Street Partners, said on Wednesday that signs of turbulence in the AI boom are mounting, and the firm is therefore largely staying on the sidelines. He noted that capital expenditure in the AI sector is unprecedented in scale, and because the technology continues to evolve, no one truly understands its unit economics — making it especially difficult to assess in credit, while equities are a somewhat different story. Waxman said the company is concerned about the rapid expansion of AI credit and the speculative frenzy, animal spirits, or fear of missing out, and has begun to see signs of turbulence, such as banks seeking to sell construction loans. As risk concerns intensify, lenders have scaled back financing for AI infrastructure projects.
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