AI Infrastructure Costs Weigh on Global Technology Stocks

Investor anxiety regarding the high capital requirements for artificial intelligence infrastructure is weighing on global technology stocks. Market concerns center on company valuations and the timeline for profitability as firms face rising global interest rates.

Morgan Stanley estimates that AI infrastructure will require $1.5 trillion in external financing by 2028. In response to these costs, SpaceX, Broadcom, and Oracle are expected to raise billions of dollars to secure high-end AI chips. However, some firms are retreating from public markets; Australian data center operator Firmus canceled its $5 billion initial public offering in favor of private fundraising.

Financial volatility is also affecting AI revenue signals and sovereign debt. OpenAI reported September annualized revenue of nearly $50 billion, a figure that represents a decrease from previous signals. Simultaneously, the European Central Bank and euro zone finance ministers have urged France to pass its 2027 budget to stabilize bond markets amid a global bond selloff and elevated borrowing costs.