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The Glacial Lake Outburst Problem in AI IPOs

Paul Kedrosky · 9 Oct 2026

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Every claim below was made in this piece, quoted word for word and numbered in the order the piece makes them, so you can read it there rather than take our word for it. The sentence above each quote is our reading of the claim, not their wording. Each quote was checked against a stored copy of the page at build time; where the two differ, the quote is the fact.

  1. institutional investors are reserving capital, managing exposure, and waiting for the two transactions that will define the AI market. The capital market effect is to suppress everything else.
  2. Bankers (and journalists) interpret the slowdown as deteriorating sentiment. Both are wrong.

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