The AI Boom Reaches the Credit Markets

Last year, AI companies were funding data centers, chips and power through existing cash flow. Today they are raising new capital through equity and debt, with bond issuance potentially exceeding $350 billion in the US investment-grade market this year.

AI exposure now extends into public and private credit, and pressure is starting to show on individual names, with Oracle's spreads reaching 215 bps. Investors should therefore remain selective and mindful of concentration, as there may be fewer places to hide.

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