A-Infos (en) France, UCL AL #373 - Spotlight --- AI and Imperialism: Economic Storm, Finance Navigates by Sight (ca, de, fr, it, pt, tr)[machine translation]

Technological revolution, "  inventive  " finance, geopolitical 
conflicts... The capitalist economy is under severe strain. Yet, timid 
regulations had been put in place following the previous subprime 
mortgage crisis . It  seems  that neoliberal finance, and capitalism 
more generally, is incapable of reform... So, who will trigger the next 
economic crisis ? --- Several economic news items are on everyone's 
lips. Let's start with the promised technological revolution: that of 
artificial intelligence (AI) [1]. Here again is the myth of the miracle 
technology whose invention will resolve all the contradictions of 
capitalism. In any case, this new automation is fueling an 
intensification of class struggle. Layoff plans are piling up, and the 
exploitation of countries in the Global South, the AI's unsung heroes, 
is increasing. This technology is resource-intensive and also leads to 
conflicts over resources (wars in Ukraine, Sudan, the Democratic 
Republic of Congo, etc.).

Economically, even if financial indices are rising in June 2026, AI is 
not generating profit. It is now financed by debt. Amazon took out a 
$17.5 billion term loan for AI, bringing its debt to over $225 billion. 
Cipher Digital raised $810 million through speculative lending to 
complete a data center for Amazon. Private equity funds are the source 
of most of the debt for these data centers. Morgan Stanley [2]estimates 
that they could balloon by an additional $800 billion in the next two 
years. The inability to repay this debt is a real danger.

By 2025, there were nearly 12,000 data centers worldwide.
Field Engineer
The private credit cyclone
Private lending is a sector that took off after the 2008 financial 
crisis. Governments were then forced to put safeguards in place for 
banking activities to limit risks. One example is the Dodd-Frank Act of 
2010, which "  introduces accountability and transparency into the 
financial system .  " These regulations partially restrict banks by 
prohibiting them from issuing excessively risky loans. Finance is making 
a comeback through the private lending system.

Private lenders differ from banks in that they don't have a printing 
press. Indeed, with a traditional bank loan, the money you borrow 
appears "  out of nowhere  " (and disappears once it's repaid). Private 
lending companies, on the other hand, must first raise the funds they 
then lend. American pension funds are a prime example, where Americans 
invest their money hoping to accumulate enough capital for a comfortable 
retirement.

At first glance, these investments seem attractive because the interest 
rates reach 10% per year, a rate much higher than what can be found on 
traditional markets. But, if these rates are high, it is precisely 
because the borrowers are considered unreliable... And rightly so, 
because if they were creditworthy, they would simply take out loans at 
lower rates from standard banks or on the bond markets [3].

Companies offering private loans are more vulnerable than traditional 
banks and are highly exposed to sudden withdrawals of deposited capital. 
To mitigate this risk, clients are limited in the withdrawals they can 
make: no more than 5% of their total deposits each quarter. This is to 
prevent a widespread panic that would almost certainly lead to the 
fund's collapse.

The system works... provided the loans are repaid ! Default rates 
[4]continue to rise, and we are moving beyond the "  calculated risk  " 
zone, leading to a loss of investor confidence, withdrawal requests 
exceeding 5%, and restrictions on refinancing funds (deemed less safe). 
The stability promised by limiting withdrawals is pernicious because 
investors expose themselves to bankruptcy and could contaminate other 
sectors to meet their urgent liquidity demands. Conversely, if 
withdrawal requests are met, the funds themselves risk collapse, 
triggering a cascade of losses. For the companies that depend on them, 
as well as for the 13% of individuals, private credit is therefore a 
vulnerability in the event of a crisis.

The Hormuz hurricane
The imperialist war launched by the United States against Iran has 
become bogged down. The blockade of the Strait of Hormuz has cost the 
global market 10% of its oil and 20% of its liquefied natural gas. The 
use of strategic reserves, rising prices, and decreased consumption have 
allowed wealthy countries to mitigate the impact of the blockade, while 
others have resorted to rationing (Vietnam, Indonesia, Thailand, India). 
Even after the peace agreement, the disruption to the supply chain is so 
severe that it will take time to return to equilibrium.

After trying to impose his will by force alongside Israel, Donald Trump 
signed a ceasefire agreement which he presents as a victory, while this 
agreement shows a blatant military defeat.
United States Department of Defense
Hormuz is also a transit route for 30% of the world's fertilizers and 5% 
of its grain. Ten percent of the world's aluminum production capacity is 
located in the Persian Gulf. Copper is not directly threatened, but the 
sulfuric acid needed for its processing depends on sulfur co-produced 
from hydrocarbons. These metals are key resources for... the AI revolution !

Breaking the rogue wave of the crisis
AI, private credit, and the Strait of Hormuz are the convenient 
scapegoats for the next global crisis. But the real causes run deeper. 
The financialization of the economy is a capitalist counter-revolution 
at the end of the "  Thirty Glorious Years  ." To respond to workers' 
struggles and the falling rate of profit, capitalists attempted to 
generate profit through the financial sphere, bypassing the real 
economy, thus fostering speculative bubbles. Money creation fails to 
keep pace with value creation, leading to the bursting of the bubble. 
Lacking financial resources, companies begin laying off workers while 
simultaneously squeezing the remaining employees to limit costs and 
maintain value. Otherwise, it's closure. All of this results in 
shortages, unemployment, stagflation [5], and competition from 
imperialist powers. Our social class is therefore paying the price for 
the capitalists' lack of profit. The state, as manager of capitalism, 
intervenes to bail out the losses of sectors deemed too big to fail 
through public debt... and this same debt justifies, in the medium term, 
austerity policies including cuts in public investment or the 
privatization of sectors, offering new opportunities for capitalists to 
invest. The cycle can begin again.

Financialization is not an abuse of the capitalist system. It is its 
contemporary structure, founded on the exploitation of human labor, the 
overexploitation of natural resources, and imperialism. Faced with the 
ecological and social emergency, and in the context of the structural 
crises of capitalism, we must organize popular resistance and propose a 
radical alternative through the socialization of production, investment, 
and trade. A topic for a future article.

Adrien (UCL Finistère), Gwayne (UCL Paris Nord-Est) and Nicolas (UCL Caen)

To validate

[1] " Economy: Will generative AI bring down Big Tech? ", Alternative 
libertaire no. 364, October 2025.

[2] US investment bank.

[3] The bond market is the market where companies and governments raise 
capital. It differs from the stock market in that it deals with debt 
rather than ownership.

[4] The default rate measures the percentage of loans that a lender 
considers impossible to recover.

[5] Slowing of economic growth due to high unemployment and a 
significant rise in prices.

https://www.unioncommunistelibertaire.org/?IA-et-imperialisme-Tempete-economique-la-finance-navigue-a-vue
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