International Edition · Mon 26 Oct 2026
Financial Markets · via Bloomberg
AI's Borrowing Bill Becomes the Market's Biggest Worry
Rising financing costs for the AI build-out are holding stocks back from new highs. Neocloud shares fell again after Elon Musk predicted that most will fail.
Not investment advice: this article is for information only.
Chanan Zevin - Chief Editor and Head of Desks
Published
The worry
Bloomberg's market strategists wrote on Monday that a wall of worry increasingly dominated by AI financing costs must be dealt with before stocks can make a run at fresh highs. Investors are rotating into defensive positions and selling some of AI's biggest winners.
The trigger
CNBC reported that Nebius, CoreWeave and Iren fell more than 4% in early pre-market trading after Musk wrote on X that debt markets had almost entirely shut off for companies without substantial non-AI revenue, and that 'the 200+ neoclouds are going to see guppy-level death and consolidation'. The shares later pared losses.
Background
CNBC said CoreWeave and Nebius are down more than 30% over the past month and Iren 40%, after spreads on CoreWeave's five-year credit default swaps reached distressed levels. Nvidia's Jensen Huang told CNBC demand for neoclouds is 'off the charts' and the shortfall is working capital.
Our view
Musk runs data centres that compete with the neoclouds, so his forecast is not neutral. But the market is now asking the right question: who can pay for the chips when credit gets expensive?
Sources
- Bloomberg, 'AI Funding Angst Stands in Way of Return to Highs: Taking Stock', 26 October 2026 · bloomberg.com
- CNBC, 'Neocloud stocks fall as Elon Musk says more than 200 of them face guppy-level death', 26 October 2026 · cnbc.com