Soaring debt costs and record default-insurance prices show investors are no longer willing to fund the AI buildout without proof it will pay off.
Investors spent the past few years rewarding almost any company tied to artificial intelligence. That patience is wearing thin. The market now wants to know what the AI buildout really costs, who is paying for it, and how long it will take to earn the money back. Fears of higher interest rates have made those questions harder to ignore, especially for companies that borrow heavily to expand. Upcoming elections and policy uncertainty are adding to the strain. A more selective market
The AI trade isn’t over, but it is changing. Demand for computing power remains strong, and both CoreWeave and Oracle have large backlogs of signed contracts. What has changed is the price of the money needed to deliver on them.