Investors remain bullish on AI despite mounting valuation and financing concerns
Investors continue to pour money into AI firms, but growing doubts about high valuations, costly infrastructure and uncertain adoption are shaking confidence.
Since 2024, AI-related equities have accounted for roughly two-thirds of returns in the S&P 500, and venture funding this year has been almost exclusively directed at AI startups, some approaching trillion-dollar market caps. At the AlphaMarket 2026 conference, investors warned that the boom is being financed with circular, debt-heavy structures and that the cost of building AI infrastructure could take decades to recoup.
Reports of rogue AI incidents and companies like CoreWeave accumulating $52 billion in liabilities without a clear repayment path have added to the unease. Private-market liquidity is tightening, with the number of unsold PE-backed firms more than doubling since ten years ago and funding rounds extending to later series. Consumer sentiment is also turning skeptical, as many Americans fear job displacement, distrust AI leaders, and are wary of expanding data-center footprints ahead of upcoming midterm elections. The upcoming Anthropic IPO is seen as a litmus test for both public and private market appetite for AI investments.
Why it matters
The story shows how rising doubts about AI financing could affect market stability and future tech investment.
How this story developed
- Oct 13 Asian markets tumble as US chip slump drags South Korean shares below 3%
- Oct 14 US semiconductor index fell 2.7% and the Nasdaq 100 slipped 0.7%, widening the regional decline.
- Oct 15 CoreWeave’s shares dropped 6% and its 2031 bond yields rose above 16% as investors fret over its $50 billion debt load and AI-related borrowing.
- Oct 16 CoreWeave rebounded 6% after a steep decline, lifting broader semiconductor shares.
- Oct 18 CoreWeave’s bond yields rose above 16 % and default‑insurance costs jumped to about 1,000 basis points.
- Oct 20 Asian markets slipped following earlier AI‑stock rebounds, as funding concerns and lower oil prices outweighed the US chip rally.
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