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Investors dump data centre bonds as AI borrowers face 'Darwin moment' amid £20bn deal collapse

Credit default swaps tied to AI and data centre assets spiked as a £20bn data centre deal collapse triggered a broad sell-off in AI-linked bonds.
Credit default swaps tied to AI and data centre assets spiked as a £20bn data centre deal collapse triggered a broad sell-off in AI-linked bonds.

A £20bn data centre deal has collapsed, triggering a rout in AI infrastructure bonds and sending the cost of default insurance spiking across the sector. Debt issued by AI infrastructure providers and neocloud companies has sunk towards stressed territory as confidence in the sector wobbles. The deal's failure has shaken lenders who had bet heavily on the AI build-out boom continuing unchecked.

The cost of insuring against AI borrower defaults has spiked sharply as data centre confidence crumbles.

Analysts are warning the sector faces a 'Darwin moment' — only the best-capitalised players will survive the rout.

Bond markets are now pricing in the possibility that the AI infrastructure spending wave has outrun actual demand.

MoreThe TelegraphCollapse of £20bn data centre deal fuels AI bond routReutersCost of AI default insurance spikes as data centre confidence wobblesFinancial TimesInvestors dump data centre bonds as AI borrowers face ‘Darwin moment’The TimesData centre expansion could push up energy bills, energy chiefs warn
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