PremiumPause Or Wall? Behind Morgan Stanley's AI Debt "Lull" Lurk Delays, Blackouts And A Buildout Only Six Companies Can Afford
Morgan Stanley calls it "a pause, not a pullback." We have a different word for it: a wall.
When the bank's credit strategists published their monthly "The State of AI Financing: A Pause, Not a Pullback" (available to pro subs), the headline was a lull: just ~$23 billion of AI-related supply globally in September, the second-lowest month of the year, and zero AI-related issuance in US IG. MS was quick to reassure that this "does not reflect weakening fundamentals or shortage of capital to fund the buildout," and blamed the slowdown on i) significant front-loading of issuance over the summer, ii) "emerging signs of regulatory/political challenges to new data center construction," and iii) the rates selloff "possibly requiring project-level renegotiations for data-center deals."