What the hell happened this week? The AI infrastructure building spree, the rush to build data centers full of computer chips, showed up in the government's latest report on the U.S. economy, which grew at a 3.4% yearly pace from July through September. But Google, Meta and Amazon are now spending more on buildings and equipment, mostly those data centers, than their businesses bring in after paying their bills. Google and Amazon are borrowing tens of billions of dollars, and Meta is selling new shares. Meanwhile, the Federal Reserve held interest rates steady, but two of its officials voted to raise them.
Its business still works. Its finances didn't. Here's how Chapter 11 keeps the photo company running, and how its plan would wipe out every shareholder and sell Getty Images to the family and investor that already owned most of it.
What the hell happened this week? One of the world's richest companies spent more on its AI build-out than its business brought in, riskier companies put off borrowing, home contracts fell 7.3% in September, and on Thursday markets charged France more than America to borrow for ten years. The wall is the price of money, and oil above $110 is one reason it may stay high.
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A hedge against a company's default.
Rock Island Southern Railroad Company bond, 1907 · Knox College · public domain
Last week, protecting $10 million of CoreWeave's debt cost more than $1 million a year, on paper. Here's who is actually in that trade, how the money moves, and why the price can reflect who wants protection, not just the odds of default.
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Same AI boom. Different borrowers.
Photograph: PiDatacenters · Wikimedia Commons · CC BY-SA 4.0
Chip stocks lost more than $1.6 trillion over six sessions, and the broad market barely flinched. The real change was in lending: investors priced AI builders' debt according to whose cash actually repays it.
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How the 10-Year Treasury Yield Became One of the Most Powerful Numbers in Finance
A government borrowing instrument became one of finance's most influential reference prices. Here's how it happened—and why its movements reach far beyond Washington.
France has a vast borrowing programme, and the institutions financing it are demanding more in return. To understand the pressure on one of Europe's largest economies, follow the money—from the investors buying its bonds to what happens when yesterday's cheap borrowing comes due.
Most of the money is due back the next day. Then the cycle starts again. The market behind it helps finance Treasuries, dealers and hedge funds—and even helps set one of the most important interest rates in the world.
