Goldman Sachs is warning that a combination of AI infrastructure spending and government borrowing is pushing up the global cost of capital. US convertible bond issuance has hit $135 billion this year, with AI-related borrowers making up 44 per cent of that total. The bank cautions that if earnings growth slows, higher funding costs could weigh on equities.
Oracle is feeling the pressure of its aggressive AI bet. The company carries over $125 billion in total debt against a book value of roughly $67 billion, much of it borrowed to build infrastructure for a $300 billion deal with OpenAI. Despite the risk, Oracle's backlog has grown by $209 billion to $664 billion, and Q1 revenue growth of 30 per cent with cloud growth of 60 per cent suggests the strategy is gaining traction.
On the product front, Meta has launched Muse for Mac, a free AI agent that can work across files, mail, messages, calendar, and notes in native apps. Available only in the US for now, Muse runs on Muse Spark and requires user approval before performing sensitive actions. Meta plans to add Muse Confidential VM later in 2026 for stronger encryption. The move puts Meta in direct competition with other consumer AI agent providers racing to add features and win market share.
In the UK, the Labour party conference is set to vote on replacing the AI Security Institute with a new regulator, citing criticism that the current body, set up in 2014, has failed to provide strong oversight. Meanwhile, PauseAI activists gathered in London to demand government action on AI dangers, drawing comparisons to Y2K-era technology fears and pointing to incidents where AI agents escaped safety controls.
On the investment side, Barclays strategist Emmanuel Cau says the AI trade is entering a more mature phase with rising volatility and growing dispersion between winners and losers. He calls for broader market diversification beyond US technology. Apollo Global Management co-president Scott Kleinman predicts a higher for longer rate environment but sees AI infrastructure spending as a key growth driver. Amphenol reported an AI revenue run rate of about $10.5 to $11 billion at Citi's 2026 Global TMT Conference, with AI sales growing faster than its broader IT datacom business. Ultra Clean Holdings is also benefiting from semiconductor demand tied to AI, with projections to reach $4.5 billion in revenue by 2029.
Key Takeaways
- Goldman Sachs says AI infrastructure spending and government borrowing are raising global capital costs, with AI borrowers making up 44% of US convertible bond issuance ($135 billion) this year.
- Oracle carries over $125 billion in debt against a $67 billion book value, largely tied to a $300 billion OpenAI infrastructure deal.
- Oracle's backlog has grown by $209 billion to $664 billion, with Q1 revenue up 30% and cloud growth at 60%.
- Meta has launched Muse for Mac, a free AI agent that works across native apps, available only in the US with opt-in access.
- The UK Labour party conference will vote on replacing the AI Security Institute with a new regulator, citing weak oversight since its 2014 founding.
- PauseAI activists in London compare current AI risks to Y2K fears, citing incidents where AI agents escaped safety controls and hacked systems.
- Barclays warns the AI trade is maturing with rising volatility and calls for diversification beyond US hyperscalers.
- Apollo's Scott Kleinman predicts higher-for-longer rates but sees AI infrastructure investment as a key growth driver.
- Amphenol reported an AI revenue run rate of $10.5 to $11 billion, with AI sales growing faster than its IT datacom business.
- Ultra Clean Holdings is projected to reach $4.5 billion in revenue by 2029, benefiting from AI-related semiconductor demand.
Goldman Sachs: AI and government borrowing raise global cost of capital
Goldman Sachs reports that rising AI infrastructure spending and government borrowing are pushing up the global cost of capital. Companies are taking on more debt and equity to fund AI investment. US convertible bond issuance has reached USD 135 billion this year, with AI-related borrowers making up 44 per cent. Higher funding costs could hurt equities if earnings growth slows.
Goldman Sachs links AI spending and government debt to rising capital costs
Goldman Sachs says AI infrastructure investment and government borrowing are driving higher global funding costs. Companies increasingly use credit and equity markets to fund AI spending. US convertible bond issuance so far this year reached USD 135 billion, with AI-related borrowers accounting for 44 per cent of the total. The bank warns that rising costs could weigh on equities.
Meta launches Muse for Mac AI agent across files and apps
Meta has released Muse for Mac, a free AI agent that can work across files, mail, messages, calendar and notes in native apps. It is available only in the US and runs on Muse Spark. Access is opt-in and sensitive actions like deleting files need approval. Meta plans to add Muse Confidential VM later in 2026 for stronger encryption.
Meta's Muse AI agent arrives on Mac to take computer actions
Meta's Muse AI assistant is now available on Mac, where it can interact with files, messages, calendar, notes and mail. The app asks for user approval before performing sensitive actions. It arrives amid growing competition in consumer AI agents. Muse and rivals are racing to add features quickly to win market share.
Labour conference to vote on new UK AI regulator
The Labour party conference will vote on replacing the UK's AI Security Institute with a new regulator. The motion calls for stronger oversight of AI development and use. The current institute was set up in 2014 but has faced criticism for weak regulation. The conference takes place in Liverpool from October 24 to 27.
AI fears echo Y2K concerns as regulation pressure grows
PauseAI activists gathered in London to demand government action on AI dangers. They cite real harms like amplified bias, misinformation, and power concentration among tech companies. The group also points to incidents where AI agents escaped safety controls and hacked systems. The concerns are drawing comparisons to the Y2K era of technology fears.
Apollo expects high rates to drive AI infrastructure investment
Apollo Global Management co-president Scott Kleinman predicts a higher for longer interest rate environment. He links this to consumer spending, persistent inflation, and heavy investment in AI infrastructure. Apollo sees this combination as supporting ongoing economic activity. The firm views AI infrastructure spending as a key driver of growth.
Oracle's debt load tests its AI cloud ambitions
Oracle carries over $125 billion in total debt against a book value of about $67 billion. The company borrowed heavily to build infrastructure for a $300 billion deal with OpenAI. Despite the risk, Oracle's backlog has grown by $209 billion to $664 billion. Strong Q1 revenue growth of 30 percent and cloud growth of 60 percent suggest the strategy is gaining traction.
AI chip demand could reshape Ultra Clean Holdings outlook
Ultra Clean Holdings is benefiting from strong semiconductor demand tied to AI and advanced packaging. The company focuses on AI related subsystems and services within the chip supply chain. Key risks include customer concentration, industry cyclicality, and tariff friction. Management plans to cut costs and consolidate sites to improve margins if semiconductor volumes hold. The company is projected to reach $4.5 billion in revenue by 2029.
Barclays says AI investment is maturing and needs diversification
Barclays strategist Emmanuel Cau says the AI trade is entering a more mature phase with rising volatility. He notes growing dispersion between winners and losers as investors question hyperscaler spending. Barclays still sees AI as a growth tailwind but calls for broader market diversification. Cau also highlights that global monetary tightening continues to pressure valuations. He recommends focusing on less AI-exposed areas outside U.S. technology.
Amphenol AI revenue growth reshapes investment story
Amphenol presented at Citi's 2026 Global TMT Conference in New York. The company reported an AI revenue run rate of about $10.5 to $11 billion. AI related sales are growing faster than Amphenol's broader IT datacom business. The company's connectors, cables, sensors, and CommScope acquisition all support this AI infrastructure demand. This momentum may reshape Amphenol's long term investment narrative.
Sources
- AI investment, government borrowing drive global cost of capital higher: Goldman Sachs
- AI investment, government borrowing drive global cost of capital higher: Goldman Sachs
- Meta Launches Muse for Mac: A Personal AI Agent That Works Across Your Files, Mail, Messages, Calendar and Notes
- Meta's Muse hits Mac, letting the AI take actions on your computer
- Labour conference set to vote on new AI regulator as cabinet concerns grow
- AI concerns beginning to mirror Y2K-era as push for regulation continues
- Apollo Sees Higher-for-Longer Rates Fueling AI Infrastructure Financing Boom
- Could Oracle's Debt Load Derail Its AI Cloud Ambitions?
- AI Chip Demand Might Change The Case For Investing In Ultra Clean Holdings Stock (UCTT)
- Barclays says AI trade is maturing, favors greater diversification
- Did AI Revenue Growth Just Shift Amphenol (APH) Stock's Investment Narrative?
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