The Credit Line: the AI credit complex, mapped

What the series is attempting

The September letter is one thesis in three parts, and it fits in a sentence: AI can succeed as a technology while the borrowing built around it makes the journey Hyman Minsky described, from finance that pays for itself to finance that only works while new money keeps arriving.

In 1933 Harry Beck redrew the London Underground map. He threw away true distances and kept only what a passenger needs: which lines run through which stations, and where they meet. This series draws the money behind the AI build the same way, because in a credit system a delay at one station travels down the lines to the rest. In September the strain showed at four points on the map. Oracle’s Jupiter loans were quoted at around 90 cents on the dollar, CoreWeave paid steadily more to borrow against its chips, SB Energy’s listing stalled, and investors queued to leave Blue Owl’s credit funds. Part I draws the map. Part II follows the first station to light up. Part III asks how far the system has travelled along the road to 2007.

In September, on the 2007 clock, this looked like June. A month on, the clock has run fast. It looks more like October.

Part I · 20 min read Signal Failure The AI credit complex, mapped: who owes whom, and where a delay in one place spreads Read Part I → Part II · 10 min read An Act of Jupiter The first stress test: Oracle’s force majeure notice and $18 billion of loans at 90 cents Read Part II → Part III · 18 min read Still Contained? Where the AI credit complex stands against 2007 Read Part III →

Also this month: Interim Note, Short GBP/JPY · 3 September →

Previous letter: August · A Credit Cycle Wearing AI’s Costume. Next: October · The AI Catch-22 (Too Slow, Too Soon, Too Cheap).