Aware Super CIO Warns of AI Financing Risks for 2026

The newly appointed Chief Investment Officer of Aware Super, Simon Warner, identified the future economic model of the artificial intelligence industry as the most prominent financial market risk for 2026. He warned that funding arrangements in the sector are showing orange lights, signaling a shift in how AI infrastructure is financed.

Warner noted that over the last six months, the industry has moved away from stable retained earnings to fund data centers and large language models, shifting instead toward circular and conduit financing. While current earnings growth supports high valuations, he cautioned that a dangerous interdependence exists between the valuations of the Magnificent Seven stocks and U.S. domestic demand.

Aware Super, which manages A$210 billion in assets and invests heavily in companies like Microsoft, Nvidia, Apple, Alphabet, and Meta, is monitoring these trends closely. The shift toward alternative funding is exemplified by Meta Platforms Incorporated, which secured a $27 billion financing deal with Blue Owl Capital in October to fund its largest global data center project.