LIVE MARKETS-The slow way rates matter for the AI trade

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THE SLOW WAY RATES MATTER FOR THE AI TRADE

The theme of the week has been worries about AI trade and rates, but while everyone might be nervous about a big bang shock, Mark Dowding, fixed income CIO at BlueBay, says higher rates could slow the AI buildout through countless small decisions

In a Friday note, he says companies in sectors beyond AI are starting to get squeezed by higher rates, and this is translating into a greater focus on cost containment, including on AI.

"It seems that token spend is starting to be rationed by many managers after an initial free-for-all," he said.

"This is not to suggest that AI growth and infrastructure build is set to slow or stop, just that the continued pattern of quarter-on-quarter acceleration across all metrics may be starting to moderate," Dowding continues.

(Alun John)

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