American International Group Inc

Arthur Hayes, co-founder of BitMEX and chief investment officer of the investment firm Maelstrom, wrote in his newsletter "Crypto Trader Digest" on the 21st that the slowdown in AGI development announced by Anthropic, OpenAI, and SpaceX, while framed as a matter of "safety," is in reality a move to mask deteriorating profitability. He said the AI compute demand from these three companies underpins more than 1 trillion dollars in investment-grade debt, plus hundreds of billions of dollars in lower-rated debt and loans, and argued that a slower development pace is an issue that feeds directly into financial markets and the global supply of dollars. Behind this, he noted, is price competition from cheap Chinese-made AI models, with U.S. models unable to compete against Chinese models priced at roughly one-hundredth of their level. He warned that slower development would destroy compute demand and could erode the value of AI-related capital investment, much of which is financed with debt. He further noted that private equity firms are increasingly buying insurers and setting up affiliated reinsurers to satisfy regulatory capital buffers without any real funding burden, and said that among these affiliated reinsurance assets, the portion tied to AI data center debt and private credit to AI-related companies could reach as much as 1.54 trillion dollars. If compute demand from the AI giants slows more than expected, he said, rating agencies would downgrade AI data center debt, the insurers holding it would be forced to set aside additional capital, and the U.S. government would face a choice between becoming the "buyer of last resort" for compute or bailing out the insurance industry as it did for the U.S. insurance giant AIG in 2008. Either path, he said, leads to the same result: an expansion of the money supply, and if easy monetary conditions persist, that will act as a factor pushing up the prices of cryptocurrencies including Bitcoin as a destination for speculative capital.

American International Group shares have fallen 5.9% over the past six months to $79.39, underperforming the S&P 500's 8.4% gain. Analysts at StockStory cite three reasons to avoid the stock: revenue declined 9.1% annually over the last five years, net premiums earned fell 4.7% annually over the same period, and book value per share grew only 8.3% annually over the past two years. The stock trades at 1 times forward price-to-book, but the firm sees better opportunities elsewhere, recommending a safe industrials business instead.

Hedge fund manager Lee Robinson, who scored a 900% gain during the 2008 financial crisis, is now shorting insurers including Lincoln National, MetLife, and Berkshire Hathaway using credit default swaps, betting that their growing exposure to the $1.8 trillion private credit market will lead to writedowns. Robinson’s firm Altana is launching a new fund to protect against what he sees as an inevitable downturn in private credit, a cooling of AI hype, and declining liquidity. Net notional bets on US insurers’ CDS have risen to $5.5 billion by May 22 from under $4.9 billion at the end of last year, with trading volumes increasing and the cost of default protection starting to rise. A Moody’s analysis showed that a fifth of US life insurers’ $4 trillion of fixed-income holdings were in illiquid assets, mostly private credit, at the end of 2025, up from 18% a year earlier. Robinson says the current low volatility and tight credit spreads remind him of the calm before the subprime crisis, warning that even one stressed insurer could cause industry-wide ripples.