Central bankers eye higher rates as AI boom fuels scramble for cash
- Amid weakening AI-related stocks, investors paused or pulled listings for Blackstone-backed AirTrunk Reit, Nvidia-backed Firmus, and SoftBank-backed SB Energy this past week.
- Benchmark 10-year US Treasury yields posted their sharpest quarterly rise this century in September, forcing companies to offer higher returns as data-center operators spend massive sums on infrastructure before generating revenue.
- Credit default swap spreads for CoreWeave reached a record 1,195 basis points, while Oracle's notes due in 2032 yielded 7.24% on Wednesday; Nvidia CEO Jensen Huang intervened to reassure lenders of the company's "financial strength is improving every day."
- Asian data-center mergers reached a record $21.3 billion through October 13, yet nuclear services company Holtec cited a "perfect storm" of uncertainty around data-centre demand when it pulled its US listing last month.
- The sector's conversation has shifted from "growth at any cost" to a focus on quality, said Harry Evans, a partner at law firm Freshfields, who expects deal activity to hold up through next year due to a strong pipeline.
32 Articles
32 Articles
High interest rates aren’t slowing the AI boom. That’s a problem for the Fed.
There is little sign that higher borrowing costs are doing much to slow artificial intelligence development, which includes spending on chips, data centers, and the electrical systems to power them.
This week, certain AI-linked bonds have come to offer 15% returns, after losing about a fifth of their value
The artificial intelligence boom (AI) is triggering a global capital race, forcing central banks to consider a scenario where interest rates remain high and governments need to tighten their belts after an era of generous spending. From silicon chips and data centers to electricity and telecommunications networks, governments and companies are injecting resources into direct or indirect AI-related projects, which drives the global economy, but a…
The AI boom is increasing global demand for capital and has central bankers bracing for a period of higher interest rates. Investments in chips, data centers, power grids and telecommunications are boosting economic activity but creating inflationary pressures before the promised productivity gains are realized. “If you’re a central banker, you have to admit that this is a shock,” Federal Reserve Chairman Kevin Warsh said at the annual meetings …
Central bankers eye higher rates as AI boom fuels scramble for cash
Coverage Details
Bias Distribution
- 47% of the sources are Center
Factuality
To view factuality data please Upgrade to Premium
