Goldman: "Demand For Compute Can Grow Exponentially, But The Capital To Finance It Cannot"

For two years the AI trade had one answer to every question: demand. Is the capex too big? Demand will absorb it. Are valuations stretched? Demand will grow into them. Is the debt piling up? Demand will service it.

On Wednesday the market asked a different question: who is paying? Goldman's trading desks don't like the answer, and neither, as we detailed last night, does Gartner.

The Pain Trade, Unwound From Both Ends