The AI Credit Bubble Warning That Should Have Robotics Folks Paying Attention

I called my old colleague at Siemens last week, just to get a sense of what he's seeing. He wouldn't go on record, but the gist was that everyone's nervous. The order books look healthy on paper, but the payment terms are getting stretched. Customers who used to pay net 30 are asking for net 90. That's usually the canary in the coal mine.

Cohen's point about historical precedent is well taken. The railroad bubble of the 1870s, the dot-com crash, these weren't caused by the underlying technology being worthless. Railroads were genuinely useful. The internet obviously changed everything. The problem was the financing structures, the overbuilding, the assumption that growth would continue indefinitely. Sound familiar?

What I don't know, and I'll admit this freely, is how exposed the major automation suppliers actually are. The big Japanese firms (Fanuc, Yaskawa) tend to be more conservatively financed than their American and European counterparts. But the startup ecosystem, the companies building the next generation of warehouse robots and autonomous mobile platforms, they're the ones I worry about. A lot of them are running on venture debt and convertible notes that assume a friendly exit environment. If credit markets tighten up, that exit environment gets a lot less friendly very quickly.

The other thing worth noting is that we don't have great visibility into how much of this AI-adjacent debt is actually secured by real assets versus, well, vibes. When I was evaluating automation purchases, we'd look at the residual value of the equipment. A Kuka robot holds its value reasonably well. A custom software stack built on top of someone else's foundation models? That's harder to repossess.

I'm not saying the sky is falling. Industrial robotics has survived multiple credit cycles and will survive this one. But if you're in this industry and you're not paying attention to what the credit analysts are saying, you're making a mistake. The money people see patterns that us engineering types sometimes miss.

Cohen's warning is basically that we've seen this movie before. Heavy investment in a transformative technology, followed by bubble formation, followed by a painful correction. The technology survives and eventually thrives. A lot of the companies and investors don't. It's too early to say exactly when or how severe the correction might be. But the fact that serious people at firms like DoubleLine are using the word "bubble" out loud, at major conferences, suggests we're further along that curve than the optimists want to admit.

James Chen · 25 Jun · 5 min