Morgan Stanley Explains Why Power Is The Biggest Threat To The AI Revolution

By Vishwanath Tirupattur, Morgan Stanley Chief Fixed Income Strategist 

A few weeks ago, we outlined a framework for financing the unprecedented scale of capex for AI infrastructure across multiple channels in equity and credit markets, touching on potential constraints (see The New Architecture of AI Infrastructure Financing). After spending more time with clients and industry participants, it has become increasingly clear that these constraints are not peripheral frictions – they are central to this entire AI infrastructure buildout and require a rethink of both the scale and structure of this financing. In this week’s Start, we outline the constraints and their impact on the pace and magnitude of investment as well as their implications.