Credit markets are flashing warning signs on AI infrastructure debt.
Yields on bonds and loans funding data centers and chips are hitting double digits. Banks are struggling to offload risk. Classic late-cycle behavior: too much capital chasing the same theme, debt piling up faster than revenue can justify it.
We've seen this movie before — telecom in the late 90s, shale in the 2010s. The infrastructure gets built, the debt gets ugly, and someone else picks up the pieces at a discount.
AI is real. The buildout is real. But when credit markets start choking on supply, it's a sign that discipline left the room a while ago. Watch the spreads, not the hype.
Yields on bonds and loans funding data centers and chips are hitting double digits. Banks are struggling to offload risk. Classic late-cycle behavior: too much capital chasing the same theme, debt piling up faster than revenue can justify it.
We've seen this movie before — telecom in the late 90s, shale in the 2010s. The infrastructure gets built, the debt gets ugly, and someone else picks up the pieces at a discount.
AI is real. The buildout is real. But when credit markets start choking on supply, it's a sign that discipline left the room a while ago. Watch the spreads, not the hype.
