Credit Markets to Fuel AI Infrastructure Boom
AI models need massive clusters of servers. That translates into roughly 2.9 trillion dollars of global data center spending by 2028about $1.6 trillion on chips and hardware and 1.3 trillion on buildings, power and upkeep.
Warning! GuruFocus has detected 4 Warning Signs with NVDA.
Hyperscalers can self?fund around $1.4 trillion of that capex, but a $1.5 trillion dollar gap remains. Morgan Stanley expects private credit, corporate bonds and securitized debt to step in and fill most of that shortfall.
Cash flows alone won't cover the AI?driven buildout. Credit markets are set to become a key engine for funding the next wave of tech infrastructure.
For investors keen on this theme, tech and AI?focused ETFs such as VGT (Vanguard Information Technology ETF), IYW, AIQ (Global X Artificial Intelligence & Technology ETF) and BOTZ offer streamlined ways to gain exposure.
This article first appeared on GuruFocus.
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