Bank of America Just Issued a Stark Warning: The AI Boom Is Hitting a Cash Crunch

6 days ago 6

Rich Duprey

Mon, November 10, 2025 astatine 9:24 AM CST 5 min read

Meta (META) issued $30B successful financing for a Louisiana information center. Meta carries $37B successful full indebtedness against implicit $60B successful currency reserves.
Oracle holds astir $96B successful indebtedness aft an $18B enslaved issuance and $38B loan. Oracle’s involvement payments could devour a larger stock of its $3B quarterly nett income.
Tech companies borrowed $75B successful September and October for AI information centers. This is much than treble the yearly mean implicit the past decade.
Some investors get affluent portion others conflict due to the fact that they ne'er learned determination are 2 wholly antithetic strategies to gathering wealth. Don’t marque the aforesaid mistake, learn astir some here.

Bank of America just issued probe that points to a perchance troubling displacement successful however large tech companies money their artificial quality (AI) ambitions. It noted borrowing for AI information centers exploded higher successful September and October, with firms similar Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL), and others issuing $75 cardinal successful bonds and loans -- much treble the yearly mean implicit the past decade.

This comes arsenic superior expenditures attack limits connected what institution currency flows unsocial tin support. Consensus estimates amusement AI capex hitting 94% of operating currency travel minus dividends and stock repurchases successful 2025 and 2026, up from 76% successful 2024. This inclination raises questions astir sustainable maturation amid precocious valuations, arsenic companies whitethorn progressively trust connected indebtedness to physique the infrastructure AI models and computing powerfulness require.

So far, the tech giants person fueled their AI enlargement done beardown currency flows from halfway businesses similar unreality services and advertising. However, the standard of information halfway buildouts present demands much superior than interior resources tin provide.

Bank of America's investigation highlights this pivot, noting a surge successful borrowing successful caller months. For instance, aggregate values for cardinal players including Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and others amusement capex shares rising sharply. This suggests the self-funded exemplary that drove accelerated AI advancement whitethorn beryllium causing strain, forcing companies to pat indebtedness markets to support momentum.

Projections bespeak planetary information halfway spending could scope $3 trillion by 2028, with a important information financed externally. While currency flows stay robust, totaling hundreds of billions of dollars annually crossed the sector, the gait of concern is outstripping them.

This displacement could enactment continued AI innovation but introduces leverage that wasn't arsenic salient successful earlier phases.