AllianceBernstein: AI Slowdown Calls Won’t Stop Fundraising by Tech Firms
AllianceBernstein Holding LP's fixed-income specialists say that despite calls for a slowdown in artificial intelligence development, major technology companies will continue with fundraising and capital spending. Thierry Taglione, senior investment strategist at the firm, noted these are long-term plans spanning over ten years and unlikely to be disrupted by recent concerns about AI safety. The firm forecasts top hyperscalers will maintain high levels of nominal capital expenditures in the near term, expecting more than $1 trillion in spending next year. However, it anticipates a gradual slowdown in investment that could affect US economic growth over time. Bond issuance linked to major global hyperscalers and data centers has already exceeded $330 billion this year. While equity valuations have corrected slightly due to investor concerns about credit risks and the sustainability of AI-led growth, AllianceBernstein still sees selective opportunities in the sector. It advises favoring companies with strong free cash flow and lower leverage while underweighting those that are more stretched financially.
Tickers: $AB
Topics: artificial intelligence capital expenditures fundraising investment strategy