The latter naturally brings up the question: who will pay the massive bills? OpenAI, for example, has reportedly committed to a 20-year lease for more than 4 GW of data-centre capacity, with Nvidia providing credit support capped at roughly $105bn. Anthropic has also signed long-term infrastructure deals, including a 20-year, 401 MW lease worth about $19bn. And many companies have announced deals to invest in each other or finance each other around these two companies! Stocks were sold, bonds were issued.

So if the AI race slows materially, the key question becomes: who pays for all that infrastructure? The leases, debt and power commitments remain even if expected compute demand and revenue growth slow. And that could bring credit risk increasingly into the AI story, particularly for highly leveraged data-centre operators and lenders exposed to projects built on aggressive assumptions about future AI demand, at a time when interest rates – hence borrowing costs – are expected to rise.

What’s interesting is that the slowdown may come not because Big Tech is out of cash, or because investors won’t play along. It comes from the actual people who develop these models. So, imagine the sour mood in the markets this morning. The Korean Kospi kicked off the week with a more than 2.50% selloff on fears that slower growth would hurt demand for Korean memory chips. SoftBank tanks more than 10% – well – on unexpected and catastrophic news that OpenAI will slow down the development of its new models and postpone its IPO to next year. The Nikkei retreats to its lowest levels since the beginning of August.

And the fear is real. If the major markets across the globe could weather Middle East tensions and rising energy prices this well, and if American and European companies could print such strong earnings despite such an ugly geopolitical, fiscal and trade backdrop, it’s because AI boosted investment, growth and productivity.

And not only in the US. European Central Bank (ECB) Chief Christine Lagarde said last week that European economies benefited from AI investments and AI-led productivity gains. The UK economy printed better-than-expected growth last Friday – and expectations that UK growth would slow in the second half eased thanks to AI-led growth and productivity gains.

If AI hopes slow, what’s left to be happy about? Because the reality beyond the futuristic dreams, exciting AI capabilities and space data centres is ugly. Wars, trade frictions, disrupted global trade routes, exploding government debt levels, a stark cost-of-living crisis and no end in sight to wars and trade tensions.

On the contrary, this week will most probably bring more bad news than good: higher rates in the US and Japan.

On Wednesday, the Federal Reserve (Fed) will announce its latest policy decision. Last Friday’s CPI data came in close to expectations, with a slightly higher core CPI reading on a monthly basis, though. Combined with near-certainty of seeing these numbers push higher before they come lower boosted Fed hike expectations. Activity in Fed funds futures assesses a nearly 87% chance of a 25bp rate hike at this week’s meeting.

On Thursday, the Bank of England (BoE) is expected to keep rates unchanged: encouraging growth data and high inflation suggest that the BoE’s next move will clearly be a hike, but BoE members are willing to see the budget first before adjusting their monetary policy.

On Friday, the Bank of Japan (BoJ) is expected to hike rates too. If it didn’t, the yen would take a very bad hit, and I am not sure that the BoJ could afford that. I am also not sure it would be great for Japan’s relations with the US, or for Bessent’s financial support in reversing the yen’s bleeding.

As such, the US dollar is higher this morning, with rising oil prices and safe-haven demand supporting the greenback. The EURUSD is sharply down, testing the 100-DMA, as rising oil prices and slower AI advances could undermine the growth outlook. The USDJPY rebounds on a broadly stronger US dollar. The latest selloff remained limited near the 153 level. That level could be retested and broken if, and only if, the BoJ raises rates and hints at further normalization.

The good news is that higher Japanese rates won’t necessarily echo negatively across global risk assets, as the other central banks are tightening too – making the rate differential shrink less. But of course, if the Fed decides to stay pat, we could indeed see the rug pulled out from under global risk assets. I think someone will tell Trump that the latter would be worse for his midterm elections than a 25bp hike. Elsewhere, gold is under pressure as rising yields prevent investors from seeking refuge in the non-interest-bearing yellow metal, and even the Swiss franc is unable to provide safety this morning.

Moving forward, investors will be encouraged to take some risk off the table until there is more clarity on how higher yields combined with slower AI-led growth would impact valuations down the road. That could mean a period of correction and consolidation is ahead.

Technology-heavy indices, like the Kospi, TAIEX and Nasdaq, could be impacted more in case of a tech-led selloff, while indices less exposed to technology will remain under pressure from rising oil prices and the prospect of higher borrowing costs. As the circle narrows, hard commodities and energy- and mining-heavy indices could be a good place to hide. In this sense, FTSE futures are the only ones pointing to a slightly positive start.