Another glowing red indicator just lit up on the control panel steering the US economy: short sellers have placed a nearly unprecedented magnitude of bets against the domestic stock market.

A new analysis by the firm S3 Partners has found that short interest in the S&P 500 is now the highest it’s been since the company began compiling that data in 2010, Business Insider reports. In all, S3 found that roughly 3.7 percent of the S&P’s free float — meaning the total market value of shares available to the public for trading — is now tied up in short interest.

That’s a significant number, almost double the short interest in the S&P at the same time last year. For context, BI notes that roughly 3.8 percent of the S&P was hedged against itself right before the 2008 financial crisis, adding to a growing number of data points suggesting the economy is due for a major reckoning.

Stripping it down to plain English, this is a glaring indication that institutional investors are trying to get ahead of the AI financial bubble, which accounts for roughly 60 percent of the index’s growth since April. And the fact that a growing number of investors aren’t just exiting positions, but are actively betting against the US stock market is a massive tell.

For years, a few brave economists and financial analysts have pointed to the fact that the amount of money being spent on AI continues to rise as evidence that the AI bubble is unsustainable.

The thing is, investors are fine with rising costs if there’s enough revenue coming in to justify the spending, which for AI development has already eclipsed $1.6 trillion as of 2026. But whether we’re looking at data centers, digital ad revenue, or the cost of inference, the kind of revenue growth needed simply isn’t there, as the leading tech companies play an increasingly expensive game of kick-the-can-down-the-road.

This is the situation that has investors — and plenty of regular people — nervous about the AI financial bubble. A perfect example can be found in Google’s parent company Alphabet, which reported its second quarter of negative free cash flow this week. The company likewise raised its capital expenditure expectations by a cool $5 to $25 billion, CNBC reported, sending investors running for the hills as the long-promised AI revolution remains a long way off.

More on the AI bubble: SoftBank CEO Says You’re Too Stupid to Understand What’s Going on If You Believe the AI Bubble Is Real