The Zhitong Finance App learned that Citibank's investment strategy department analyzed that the huge scale of AI infrastructure debt financing is causing investors' concerns. Emerging cloud service providers and chip financing have become the focus of this round of sell-offs, driving simultaneous pressure on AI credit and the stock market. However, internal trends in the sector are clearly divided, and the market is dominated by underlying credit fundamentals rather than simply short-term sentiment.
Citi pointed out that the market is worried that AI construction debt is rising and that the return on investment falls short of expectations. Combined with the slowdown in the growth of leading cutting-edge AI laboratories and the resurgence of concerns about excessive AI construction, AI-related assets have recently been sold off. The pressure has spread to the technology market, and the valuation of some leveraged credit assets is approaching an unfavorable range. Among them, emerging cloud service providers are the segment with the highest volatility and the most sensitive to market sentiment among AI high-yield bonds, falling to -4.8% from the beginning of the year (as of October 14); on the other hand, data center bonds reported 1.8% from the beginning of the year to the present, and power-related bonds performed well, recording a positive return of 6.1%.
According to the data, the annualized volatility of emerging cloud service providers reached 13.1%, far higher than the overall high-yield AI sector of 6.0%; their bonds are most linked to the AI stock index. For every 1% change in AI stocks, the corresponding change in related bonds is about 0.3%. This sector's business relies heavily on financing to purchase chips, and also bears the risk of technical depreciation. It is a highly leveraged bet in the AI field. Changes in demand, return expectations, or technology iterations will directly impact its asset prices.
At the same time, there are huge differences in market views on chip financing, and there is no consensus on the life cycle of chips, and investors demand higher risk premiums. Citi believes that evaluating chip financing should break out of story logic and return to credit fundamentals, focusing on checking the loan value ratio (LTV), principal amortization mechanism, customer contract quality, and guarantee and insurance arrangements related to the residual value of the chip. The core judgment is whether cash flow can be realized and whether principal and interest can be paid in full.