Data center financing rhymes with 2006
The guest argued that aggressive, off-balance-sheet financing for data centers by mega-cap tech companies is creating a credit risk wall, reminiscent of the pre-2008 period.
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The Callback
US Treasury yields headed to 10%
29 weeks between these two statements.
The bear case presented on big tech long-dated debt is that lenders are not being compensated for the risk that AI infrastructure becomes obsolete or that promised productivity gains don't materialize over decades.
The guest argued that aggressive, off-balance-sheet financing for data centers by mega-cap tech companies is creating a credit risk wall, reminiscent of the pre-2008 period.