The AI story is becoming a financing story
AI shares helped lift the Nasdaq 1.2% on Tuesday. But behind the rally is a more practical question: who is paying for all the chips, computers and data centres needed to build AI?
Meta plans equity offerings totalling $97.5 billion. Broadcom and four financial firms have announced a $63 billion financing arrangement to help fund AI computing capacity for Anthropic, using Broadcom technology.
Anthropic’s public filing shows how costly the race can be. It reported $16.3 billion in first-half revenue and an $80.7 billion net loss. Most of that loss—$72.4 billion—came from changes in the reported value of convertible notes and related financing instruments. Its operating loss was much smaller, at $693 million.
That accounting adjustment matters when reading the headline figure, but it doesn’t make the cost of the AI race disappear. The companies building it still need huge amounts of money for chips, computers and data centres.
Investors want to know whether they can keep funding that growth—and whether the spending will eventually pay off.
Main Moves
AI shares lifted Wall Street on Tuesday. The Nasdaq rose 1.2% and the S&P 500 gained 0.6%, even though most S&P 500 stocks fell. Broadcom climbed after announcing the Anthropic financing arrangement.
Brazilian markets took a sharp hit after President Lula’s re-election. The Bovespa fell 13.9% on Monday, triggering a temporary trading halt, as investors reassessed the country’s fiscal outlook.
The Fed’s rate decision is due today. Inflation remains above the Fed’s 2% target. Investors will be watching for clues about what the central bank may do next.
A Few More Things
Microsoft offered voluntary buyouts to about 60,000 employees, roughly 27% of its workforce.
U.S. consumer confidence improved in October, rising to 91.7 from 84.2 in September.
Elon Musk warned that many AI-focused cloud providers could face consolidation as funding gets harder to find. That’s his prediction, not a settled outcome.
Bank of America highlighted a tighter memory supply outlook for 2027 and 2028 after meeting with Micron management.
On the calendar: Microsoft and Alphabet report after the market closes today. Thursday brings U.S. GDP and PCE inflation data, along with Amazon’s results.
Have a good Wednesday.
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