Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel

Key Points:

• AI token spending growth has slowed, with demand for compute being flat and highly sensitive to price changes, raising concerns about the economic viability of expanding data centers.
• Many companies investing in AI have yet to see significant productivity gains, with AI currently acting more as a cost center than a driver of growth or profitability.
• A significant portion of AI compute spending is funded by venture capital rather than organic earnings, casting doubt on the sustainability of current growth in the AI sector.
• Outside of major hyperscalers, AI has delivered little to no financial payoff to U.S. companies, with most of Corporate America reluctant to pay premium prices for AI technologies that do not yet translate into higher revenues or profits.
• Rising debt levels and complex financing structures among AI firms and data center projects are causing increased financial risk and market skepticism, as highlighted by record-high credit default swap costs for companies like Meta and CoreWeave.