Dave Gonigam dropped a line into our editorial Slack channel last week with a remarkable endorsement.

The managing editor of Paradigm Pressroom’s 5 Bullets suggested that Enrique Abeyta had written what could be the most important Paradigm article of 2026.

Enrique’s article — “AI Is Now ‘Too Big to Fail’” — raises a troubling possibility: Artificial intelligence has become so important to the U.S. economy that Washington may have no choice but to rescue it.

But rescue whom? And at whose expense?

Those questions lead directly back to Jim Rickards’ August Strategic Intelligence report, “Inside the AI Bubble.”

Jim opens with a blunt warning:

“Investing in artificial intelligence-related stocks means buying into what I believe is the biggest stock-price bubble in history.”

Jim approaches AI from a macroeconomic perspective, drawing on his knowledge of debt crises, currency markets and financial panics.

Enrique comes from another corner of the Paradigm universe. A veteran hedge fund manager and trader, he follows the money, looking for deals the market has underappreciated.

Jim sees a bubble that threatens investors’ wealth. Enrique sees an industry whose collapse could threaten the financial system itself.

And here’s where their warnings converge: AI could survive a crash that still wipes out many of its investors.

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Your Rundown for Monday, October 12, 2026...

AI’s Incestuous House of Cards

Jim’s concern begins with the billions of dollars circulating among a relatively small group of AI companies.

Money changes hands, but much of it stays within the same circle. Meanwhile, their financial obligations to one another keep growing.

What looks like a thriving industry becomes an increasingly tangled web of financial relationships.

Jim calls this circular financing. He compares it to “three or four drunks leaning on one another for support. They may appear stable, but if one falls, the rest go down with him.”

Enrique picks up that argument and adds another complication: debt.

Unlike many of the speculative dot-com companies of the late 1990s, today’s AI expansion involves enormous amounts of borrowed money.

Consider Oracle, which is borrowing billions to expand its AI infrastructure.

Enrique notes that Oracle bonds maturing in 2046 were recently trading around 85 cents on the dollar, yielding more than 8%.

That’s an unusually high yield for investment-grade debt, suggesting investors are growing wary of Oracle’s long-term financial obligations.

Enrique also cites a JPMorgan estimate that AI-related investment could reach $5.5 trillion by 2030. Some of that spending will require outside financing, including borrowing.

But what happens if the money stops flowing? Which brings Enrique to 2008.

During the financial crisis, Washington intervened to prevent the banking system from collapsing.

JPMorgan bought Bear Stearns with government help. When Washington Mutual failed, JPMorgan bought its banking operations, too. And the federal government stepped in to rescue insurance giant AIG, taking a controlling stake in the company.

The financial system survived, but plenty of shareholders suffered devastating losses.

“The system was too important to fail,” Enrique summarizes. “The companies themselves weren’t.”

Today, Washington regards American AI leadership as a national priority in its competition with China.

And the Trump administration has already demonstrated a willingness to take ownership stakes in companies it considers strategically important, including Intel and MP Materials.

A bailout wouldn’t necessarily come from Washington. Enrique envisions a future in which Microsoft could acquire a struggling OpenAI.

Such deals could preserve valuable AI technology, infrastructure and engineering talent. Washington might even encourage takeovers to safeguard America’s AI capabilities.

These are possibilities, of course, not pending deals.

At the same time, Jim questions whether today’s AI companies can generate enough revenue to justify their staggering costs.

“This is not an argument against AI itself,” he says. “It is an argument against paying irrational prices for AI stocks.”

Consider that the largest technology companies now account for an enormous share of the S&P 500. Millions of Americans have exposure to these stocks through mutual funds and index funds held in their 401(k)s and other retirement accounts, whether they follow the AI trade or not.

So even if you’ve never purchased a share of Nvidia, Microsoft or Oracle, your retirement savings may depend on their performance.

Before buying another AI stock, assess how much of your retirement savings is already tied to AI.

Remember, soaring stock prices don’t tell you whether a company earns enough money to cover its mounting expenses and debt.

Jim warns about the inflated prices investors pay for AI’s promise. Enrique warns that the AI industry could survive a financial crisis even as its investors suffer heavy losses.

A bailout might keep the servers humming, the data centers operating and America’s AI ambitions intact.

Your portfolio might not be so fortunate.

Market Rundown for Monday, Oct. 12, 2026

S&P 500 futures are 0.10% to 7,865.

Oil is up 1.45% to $93.20 for a barrel of WTI.

Gold’s down 0.70% to $4,187.10 per ounce.

And Bitcoin’s down 0.90% to $82,855.