Aug 25, 2026 · 45 min · 9 segments
In this episode of Global Rewire, we dive deep into the macroeconomic forces reshaping global markets, monetary policy, and corporate financing. Joined by executive professor and former bank…
Jill CetinaGuest
Fabio NatalucciHost
Craig TorresHost
When does this massive shock, uh, 'cause it is a positive shock on the investment side, when do we start to see the echo in other corporations? When do we start to see investment in AI, um, by, I don't know, John Deere? Like, when does the second round start to show up in the economy? Is it showing up? Or does it show up as expense? Like, they're just using it now, or how does it show up? What's the second-round effect of all this investment?
One thing is, is that, you know, all of this, uh, CapEx that these, um, companies are doing, um, I, I would argue that it makes, uh, dealing with our, our housing under supply, um, much more challenging, right? Because we've got a lot of, um, uh, investment and construction going into CapEx, uh, for this sector.
And I would just maybe make the observation, um, from a broader investment viewpoint that, um, you know, we have quite a number of, uh, different firms that are all investing in, um, you know, this type of capital infrastructure.
Do we think in the long run that we really need this many? And also, they lack pricing power, um, with this crowded of a playing field.
So, uh, I, I-- personally, I find it hard to believe that all of these companies are going to, um, emerge as winners and that we're going to not have, um, I think we will have some credit events just as we had around the dot-com, uh, you know, kind of period, and also around, uh, like the construction of US railroads, right? There's co- there, there is overbuilding that is happening, I believe.
And, uh, in order to get pricing power sufficient for some of these firms to become dominant players and, uh, you're, you're going to have to have some, uh, I think, sector consolidation.
So the forecast, one of the investment bank had a piece out on, for those four to be about $1 trillion by the end of the year, and then another $1.5 trillion next year.
Those are just the core hyperscal- hyperscaler, right, if you wanna call them that way.
There's other firms like Oracle or, I don't know, CoreWeaves, the Power Energy, all those.
So if you take the broader view on how much money capital is being raised in, in capital markets by the AI ecosystem as a broad definition, there's only so much that capital markets can absorb, right? And this is not just fixed income instruments now.
It's high yield bonds for some of, not everyone, it's investment grade credit.
You're, you're sucking up essentially capacity out of the broad range of copy-- or capital markets.
One, if rates go higher, the finance is gonna be even more expensive, right? If monetary policy gets tighter.
When does this massive shock, uh, 'cause it is a positive shock on the investment side, when do we start to see the echo in other corporations? When do we start to see investment in AI, um, by, I don't know, John Deere? Like, when does the second round start to show up in the economy? Is it showing up? Or does it show up as expense? Like, they're just using it now, or how does it show up? What's the second-round effect of all this investment?
One thing is, is that, you know, all of this, uh, CapEx that these, um, companies are doing, um, I, I would argue that it makes, uh, dealing with our, our housing under supply, um, much more challenging, right? Because we've got a lot of, um, uh, investment and construction going into CapEx, uh, for this sector.
And I would just maybe make the observation, um, from a broader investment viewpoint that, um, you know, we have quite a number of, uh, different firms that are all investing in, um, you know, this type of capital infrastructure.
Do we think in the long run that we really need this many? And also, they lack pricing power, um, with this crowded of a playing field.
So, uh, I, I-- personally, I find it hard to believe that all of these companies are going to, um, emerge as winners and that we're going to not have, um, I think we will have some credit events just as we had around the dot-com, uh, you know, kind of period, and also around, uh, like the construction of US railroads, right? There's co- there, there is overbuilding that is happening, I believe.
And, uh, in order to get pricing power sufficient for some of these firms to become dominant players and, uh, you're, you're going to have to have some, uh, I think, sector consolidation.
So the forecast, one of the investment bank had a piece out on, for those four to be about $1 trillion by the end of the year, and then another $1.5 trillion next year.
Those are just the core hyperscal- hyperscaler, right, if you wanna call them that way.
There's other firms like Oracle or, I don't know, CoreWeaves, the Power Energy, all those.
So if you take the broader view on how much money capital is being raised in, in capital markets by the AI ecosystem as a broad definition, there's only so much that capital markets can absorb, right? And this is not just fixed income instruments now.
It's high yield bonds for some of, not everyone, it's investment grade credit.
You're, you're sucking up essentially capacity out of the broad range of copy-- or capital markets.
One, if rates go higher, the finance is gonna be even more expensive, right? If monetary policy gets tighter.
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