Muddy Waters founder Carson Block says that artificial intelligence will trigger economic fallout that could make the 2008 global financial crisis “pale in comparison.”
Block argued that AI-driven job losses will cascade through the U.S. economy over the next several years. Fewer jobs mean smaller 401k contributions, which means less passive money flowing into equities.
He also pointed to weakness in private credit, where he said “too much money has gone into an asset class that just couldn’t make enough high-quality loans.”
The warning echoes concerns from Vanguard’s Shaan Raithatha, who flagged hidden risks in Big Tech’s $400 billion debt binge earlier this year.
Short Sellers Are Already Circling
The data suggests bears aren’t waiting. Hedge funds have made $24 billion shorting software stocks in 2026 so far, according to CNBC, as roughly $1 trillion in market cap evaporated from the sector. …
This post was originally published here
