Live Markets: Data centers may be risky, but AI will still win

Blue Owl Capital

24/09/2026 18:53

Main US indexes modestly red; Dow off most, down ~0.4%
Materials down most among S&P 500 sectors; communications services, energy lead gainers
Dollar rises; bitcoin inches lower; US crude rallies >3.5%; gold dips 
US 10-year Treasury yield rises to ~5.16%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
     
DATA CENTERS MAY BE RISKY, BUT AI WILL STILL WIN
Trading in technology shares was choppy on Thursday after a report that Oracle ORCL.K is seeking to protect itself from potential cost increases related to a large data center ​project in New Mexico, putting a spotlight on broader jitters about hefty investments that are being made into data centers being built to support artificial intelligence (AI). 
Oracle sent a "force majeure" notice to the project's developer, ‌a unit of Blue Owl OWL.N, Bloomberg News first reported on Thursday. Its shares were down more than 4% after the report, which cited sources familiar with the matter.  
But while Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, saw the report highlighted risks around investments in data centers, she said in a telephone interview that the Oracle report is unlikely to indicate a bigger AI bubble being burst.  
"The New Mexico-based, Oracle-funded data center news may have rained on the tech parade this morning," said Forrest.
But, noting that the publicly traded bonds aimed at funding the data center were issued at near-junk ratings, she said that this should have provided investors a warning that "this has always been a risky project."  
"Whether you think this project is a typical data center project is up for debate, but the lack of progress is alerting people to the perils of expecting data centers to be an easy thing to invest in," said Forrest. 
"A lot of data centers that are planned may never come to fruition, not just because of demand, but because of the organizations who are developing them. This is like the gold rush. These are the people that would have frozen to death in Alaska right during the gold rush because they're ill-prepared," she said. "Some of those projects will never get off the ground because of the gold rush nature. It attracts all sorts of people who try to benefit from this, the competent and the incompetent."
Noting that investors have been nervous for some time about the amount of debt being issued to fund data centers, the money manager noted that the Oracle report gave them a concrete reason to be nervous. 
"There's been a specter hanging over AI, referred to as the AI bubble. The question investors are asking is when it's going to pop. Now we have something we can point to and say look at project Jupiter. It's popping. But will the rest of the bubble pop? The bonds' ratings told you there were problems with this project. I don't think it necessarily indicates the bigger AI bubble is about to pop," she said. "I think AI wins. The capacity of chips is constrained for the foreseeable future and technology is going to work around this, so this big bubble popping thing is likely not to happen."
(Sinéad Carew)
 *****
EARLIER ON LIVE MARKETS:
HOUSING STAYS FROZEN AS HIGH MORTGAGE RATES KEEP BUYERS AND SELLERS SIDELINED CLICK HERE
THURSDAY'S DATA DUET: NEW HOME SALES, JOBLESS CLAIMS CLICK HERE
GEOPOLITICS, OIL AND YIELDS KEEP INVESTORS ON EDGE CLICK HERE
BITCOIN'S 'WINTER' MAY BE ENDING, NED DAVIS TURNS BULLISH CLICK HERE
BENCHMARK TREASURY YIELD BREAKS TO NEW HIGHS, BUT THE MOVE IS LOOKING STRETCHED CLICK HERE
WHAT DO RISING BOND YIELDS MEAN FOR EUROPEAN STOCKS? CLICK HERE
"NOT YOUR USUAL FRENCH DRAMA" CLICK HERE
STOXX DIPS IN ERRATIC TRADE AS TECH DRAGS, ENERGY UP CLICK HERE
BEFORE THE BELL: BOND SELLOFF SENDS EUROPEAN FUTURES LOWER CLICK HERE 
DIPLOMACY TAKES A BACK SEAT CLICK HERE
     

(o )