Do interest rates matter to the AI boom? “I believe they do,” Fed Chair Kevin Warsh said on 28 October.

Since the Fed’s September hike, he said, investors have grown “somewhat more discerning.” In mid-October they wanted 15–16% a year to hold CoreWeave’s bonds. Meta, which burned cash last quarter, plans to sell up to $95B of stock.

The cost of money also sets the bar for the buildout. A Columbia/NBER study finds US data centers due by 2032 must bring in $2.86T a year if investors require a 5% return, $3.55T at 10% and $4.33T at 15%.

A plan that works at 5% may not at 15%. Strategist is built to benchmark management’s strategy against an independent alternative.

What cost of money is your AI plan built on? strategist.intelligenxe.com

Google Cloud grew 103%. AWS grew 39%. Investors sold both.

Alphabet’s shares fell more than 12% on 29 October; Amazon’s dropped more than 6% after its results. The cloud boom has a bill: each more than doubled its quarterly spending on buildings and equipment. In the 12 months to September, the cash left after that spending fell to $19.7B at Alphabet, from $73.6B a year earlier, and to −$42.4B at Amazon, from $14.8B.

Both are trading today’s cash for tomorrow’s AI revenue. Whether that trade is right is a strategy question, best judged against an alternative.

Strategist is built to supply one: an independent strategy for any public company, with management’s benchmarked against it and every source shown.

Would you make the same trade? strategist.intelligenxe.com