Elon Musk Warns Banks Have STOPPED Lending to AI Companies

Elon Musk just issued an extraordinary warning about the AI boom. Quote, "As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers. Not next year, not after some theoretical bubble burst the past few weeks.

Then Meta went to the stock market with a plan to raise roughly 98 billion, one of the largest equity financing programs in history, to keep funding its AI expansion. And now we've learned that banks nearly backed away from a $63 billion financing package for Anthropic Broadcom chips and networking equipment. Broadcom CEO reportedly had to intervene in the 11th hour weekend negotiations, accept higher interest rates, and give lenders much stronger protection against losses after they quote cold feet.

Think about what all this means. These are some of the biggest companies, most important executives, and most heavily promoted investments in the world. Yet, the builders of AI are already meeting serious financing resistance.

There's always a collection.

So, how the hell are they going to fund much much larger construction plans one year from now or two years from now without something breaking? And even if the biggest companies can keep raising money, how much credit will be left for everyone else? Because this is not happening in isolation.

Triple C spreads, I keep pointing out, surged above 1350 basis points. Investment grade spreads are beginning to widen. Distressed leverage loans are approaching pandemic era totals.

Yes, you heard me right. Publicly traded private credit companies are making new lows. Core Weeaves bonds have fallen to distress levels while the entire neocloud sector is being hammered.

The credit cycle isn't merely running out of room for speculative AI borrowers. It may be running out of room.