The U.S. data center boom has been significantly driven by the growth of companies like Anthropic and OpenAI, which have created high demand for AI models and services. However, recent discussions about a potential slowdown in model development have raised alarms among investors.
Oracle, which has transformed its business to focus on AI, has seen its stock affected by these concerns, alongside other major players like GE Vernova, Caterpillar, and Vertiv, whose stocks dropped significantly on Monday. Rishi Jaluria, an analyst at RBC Capital Markets, indicated that a slowdown could hinder Oracle's cloud infrastructure business, a key growth area for the company.
Additionally, as data centers face mounting pressures, companies are expected to seek AI-related debt, with Amazon recently raising nearly $6 billion and Alphabet having raised about $10 billion earlier this year. New debt deals are anticipated to come with higher interest rates, reflecting increased demands from fixed income investors