CONCEPT
Credit Expansion
The second stage of Kindleberger's taxonomy — the financial architecture that bridges the gap between what the technology can demonstrably do and what the market believes it will do, transforming a genuine displacement into a speculative phenomenon.
Following every displacement, credit expands. The expansion is not incidental to the mania — it is the mechanism through which a genuine innovation becomes a speculative phenomenon. Credit takes familiar forms (venture capital, bank lending, corporate debt) and forms Kindleberger did not fully anticipate but whose structure his framework accommodates: the implicit credit of career decisions made on euphoric assumptions, the educational investments that allocate human capital to unverified theses, the vendor-financing circles through which companies purchase computing power from each other using capital raised on projections that depend on the continuation of the loop. The AI credit expansion operates through all of these channels simultaneously, with a scope and speed that compress the timeline for institutional response.
In The You On AI Field Guide
The familiar forms of AI credit expansion have been extensively documented. OpenAI at approximately $500 billion despite projected losses; Anthropic raising billions on the basis of future revenue assumptions; the circular financing structure