BitMEX co-founder Arthur Hayes has come up with an argument that the AI debt problem is potentially bullish for Bitcoin [BTC], even though the underlying AI slowdown itself could be negative for technology companies.
In his latest essay titled “Safety First,” Hayes argues that slowing AI development could reduce demand for computing power, putting pressure on the huge debt financing AI data centers and infrastructure.
Is weaker AI cash flow actually bad news for crypto?
Hence, he links this debt to private credit and insurance companies, warning that weaker AI cash flows could trigger credit downgrades and expose capital shortfalls in the insurance sector. Such a situation, according to Hayes, branches into two possible government responses.
First being that the US could become a “buyer of last resort” by guaranteeing demand for AI compute and supporting data-center investment, particularly if AI is viewed as strategically important in the competition with China.
Alternatively, if falling AI-related asset values create problems for insurers and other financial institutions, the government could intervene to prevent a broader financial crisis.
Yet, no matter the response, Hayes believes,
Either way, we as Bitcoin holders and crypto investors win.
Why it’s a win-win for Bitcoin?
This is because both scenarios will involve greater government borrowing and monetary expansion.
More government spending and liquidity simply means an increase in the amount of money circulating in financial markets, potentially encouraging investors to move into assets such as Bitcoin and other cryptocurrencies.
Therefore, even though weaker AI demand could hurt technology companies, Hayes views the resulting government response as potentially positive for crypto.
The amount of dollars in the system will continue to grow, and Bitcoin and selected shitcoins will rise in in price.
At the same time, government support for AI infrastructure could create excess computing capacity, eventually making compute cheaper and encouraging greater AI adoption.
AI debt crisis on the rise
This comes after reports showing that AI companies are already responsible for nearly 40% of new long-term investment-grade corporate debt, and their need for financing is expected to grow further.
The estimate from Apollo suggests the AI sector could support more than $2 trillion in additional high-quality debt. However, public bond markets may only be able to absorb less than $1 trillion by 2030 due to concentration and rating limits.
Well, this isn’t the first time Hayes has shed light on this matter. Earlier in May 2026, too, Hayes argued that Bitcoin could eventually reach $126,000, driven by the global AI race between the US and China.
Final Summary
- US could become a “buyer of last resort” by guaranteeing demand for AI compute and supporting data-center investment.
- But even though weaker AI demand could hurt technology companies, it’ll be beneficial for Bitcoin and the overall crypto market.
Be the first to comment