Hassett says AI is a well-funded ecosystem, not a financial crisis in waiting

Kevin Hassett, the former White House economic adviser, characterized the artificial intelligence sector as a well-funded ecosystem rather than a looming financial crisis. The remark is a direct response to growing concern that heavy capital spending on AI infrastructure, financed partly through debt and vendor arrangements, could replicate the leverage dynamics that amplified the 2008 downturn. Traders focused on the transmission channel of credit conditions and equity valuations, since reassurance that AI funding is backed by large, cash-generative balance sheets tends to lower perceived counterparty risk and support risk appetite across technology-heavy indices. Megacap technology names and the corporate bond issuers financing data-center buildouts are the most sensitive to any shift in this narrative, as their spreads and multiples are closely tied to investor confidence in long-duration AI returns. The next catalyst to watch is the upcoming hyperscaler capital expenditure guidance and any accompanying debt issuance disclosures, which will indicate whether funding remains concentrated in internal cash flow or is shifting toward external borrowing.

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