The unwinding of the AI trade will have bigger consequences than we think
Modine, a maker of car radiators, is now trading lower than before it announced the spinoff of that business in January to become “a pure-play climate solutions company focused on the high-growth data center” market.
Key points
- Liz’s view This feels like the beginning of the end of the AI trade.
- A data-center delay sets off a hyperscaler guarantee fight, a swarm of rogue agents hacking into a major city’s electric grid, Nvidia’s CEO admitting he slept with a Chinese spy, pick your poison.
- Notable A Bloomberg analysis of corporate and regulatory filings and credit deals showed that markets’ dependency on tech — which, these days, is mostly AI — has grown to record levels.
But the can’t-lose trade powered by a combination of FOMO and the greater-fool theory of investing is evaporating, replaced by a tinder pile ready to ignite.
Technology also now makes up more than 50% of the S&P 500’s market cap.
Additional details
- Glassmaker Corning’s stock doubled in the first six months of the year after a $6 billion deal to outfit Meta’s data centers; it has now given up almost all of those gains.
- OpenAI set out to raise $30 billion, money it could have put together in its sleep a few months ago, and appears likely to fall far short.
- Paint supplier Sherwin-Williams and HVAC-maker Carrier are in the middle of their own pivots to AI.
- Lenders are treating SpaceX, an investment-grade giant, like a flier bet on a junk-rated startup.
- The geyser of money is starting to sputter, affecting high-flying stocks and zapping debt deals.
How this summary was made: extractive summary — built from the sources' own reporting. It is drawn only from the reporting of the sources listed below — read the originals for full detail. How we summarize →
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