A growing theory says the AI boom is being financed with money from life insurance policies, annuities, and pensions — and if the loans go bad, ordinary savers and taxpayers absorb the loss.

• More than a trillion dollars of debt is now tied to AI data centers, chips, and power deals — a bigger slice of the bond market than banking.
• Private equity firms like Apollo, KKR, Blackstone, and Brookfield have bought up life insurers, then sell their own loans to the insurance companies they own.
• The SEC recently said these AI deals are not asset-backed securities, so the disclosure and risk-sharing rules written after 2008 do not apply.
• If an insurer fails, state guarantee funds cover it, other insurers get reimbursed through tax credits, and the bill lands on taxpayers.
• Much of the risk has been shifted offshore to Bermuda, where disclosure is thin — US life insurers have moved trillions in reserves to reinsurers there.

Outlook: Nothing breaks as long as borrowing stays cheap, so the pressure point to watch is interest rates — especially if Japan starts selling US government bonds and pushes rates higher.