Bank of America Survey: AI bubble becomes the top risk in credit markets, 23% of investment-grade investors see it as the biggest threat

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Media reports indicate that the "AI bubble" has become the biggest concern for credit investors for the first time, according to a Bank of America survey conducted among its clients.

Bank of America strategist Barnaby Martin and others wrote in a report on Tuesday:

"Hardly anyone is worried about geopolitics or central bank policy mistakes."

Among the investment-grade respondents in this survey, 23% cited AI bubble risks as their primary concern, compared to only 9% in Bank of America’s previous survey in December last year.

The survey showed that concerns over potentially unsustainable surges in AI company investments and valuations have now surpassed the "credit market bubble," becoming the new greatest risk. During 2025, trade tensions and a global economic recession also used to be seen as the greatest potential risks.

Investment-grade investors have raised their expectations for this year’s bond issuance from “hyperscalers” to $285 billion, a significant increase from the $210 billion expected in the December survey.

However, the strategists wrote:

"Investors are actually more relaxed about the ultimate technological disruption: only 10% of respondents believe that AI-driven corporate obsolescence is their biggest concern."

Meanwhile, they stated that fund inflows are the main factor determining credit spread levels and are sufficient to offset bond weakness brought about by AI risks.

A total of 54 high-grade and high-yield clients of Bank of America participated in the February survey, including insurance companies, pension funds, and hedge funds.

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