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Investors weigh the prospect of an AI slowdown on the U.S. buildout
CNBC • • general
Key Points:
- The U.S. data center boom has been driven primarily by the growth of AI companies Anthropic and OpenAI, but Wall Street is now concerned about the impact of a potential slowdown in AI model development on the industry.
- Companies like Oracle, GE Vernova, Caterpillar, Vertiv, Dell, and Hewlett Packard Enterprise have heavily invested in AI infrastructure, relying on sustained demand for AI chips and systems to maintain growth.
- Following a proposal by Anthropic's CEO to slow frontier AI model development, AI infrastructure stocks experienced significant declines, with GE Vernova down nearly 9% and Caterpillar over 4%.
- Analysts warn that any delay in AI model progress could negatively affect cloud infrastructure businesses, such as Oracle, which have been key drivers of stock performance.
- Amid growing pressures on data centers and rising borrowing costs, major hyperscalers including Amazon and Alphabet are raising substantial debt, with new issuances expected to carry significantly higher interest rates.
