{"id":7457,"date":"2026-10-24T20:00:48","date_gmt":"2026-10-24T20:00:48","guid":{"rendered":"https:\/\/www.vaultinsider.top\/?p=7457"},"modified":"2026-10-24T20:00:48","modified_gmt":"2026-10-24T20:00:48","slug":"heres-the-core-economic-flaw-in-the-ai-bull-case-as-stock-and-bond-trades-unravel","status":"publish","type":"post","link":"https:\/\/www.vaultinsider.top\/?p=7457","title":{"rendered":"Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel"},"content":{"rendered":"
<\/p>\n
Apollo Chief Economic Torsten Slok was on a warpath this past week, issuing a series of warnings about the AI boom as Wall Street retreated from the sector.<\/p>\n
\n
On Tuesday, he pointed to the recent slowdown in token spending growth, saying the demand curve for compute is flat and highly sensitive to price changes.<\/p>\n
Meanwhile, most companies that are investing in the technology have yet to see significant productivity returns, Slok added, with AI now looking more like a cost center than a growth driver.<\/p>\n
\u201cThe core economic flaw in the AI bull case is that the marginal cost of producing compute exceeds the marginal benefit it delivers to users, raising questions about claims of unlimited demand for data centers,\u201d he explained.\u00a0\u201cHow much compute and how many data centers are needed depends on the returns firms are able to generate with that compute.\u00a0So far, the AI payoff for firms has been slow to materialize, implying a growing reluctance to pay for AI services.\u201d<\/p>\n
The main determinant in data-center construction models isn\u2019t physical capacity or power, he argued. Instead, it\u2019s the actual price users are willing to pay for compute.<\/p>\n
But companies will only pay a high price if it translates to higher revenue growth, bigger profits, or substantial savings\u2014and there its little sign any of those exist at scale, Slok wrote.<\/p>\n
\u201cMaybe that will come in the future. Maybe not,\u201d he warned.<\/p>\n\n
<\/div>\n<\/figure>\n
On Thursday, he sounded the alarm on \u201ccircularity\u201d in token spending. AI companies have already come under scrutiny for financing deals where they provide money or guarantee debt for other companies that are also top customers, raising doubts about how sustainable their growth is.<\/p>\n
Slok suggested a similar dynamic exists between AI startups and the venture capital firms that invest in them, saying 80% of the top 1% of AI spenders are VC-backed. In his view, that means startups are paying for their compute bills with venture capital rather than organic earnings.<\/p>\n
And on Saturday, he declared AI has \u201cdelivered zero financial payoff\u201d to U.S. companies outside of the big hyperscalers. While profit margins and revenue per workers are rising for the so-called Magnificent Seven, the rest of the S&P 500 has seen no such improvement. <\/p>\n
Echoing the week\u2019s earlier notes, Slok said Corporate America overall doesn\u2019t need the latest AI model\u2014and doesn\u2019t want to pay for it. But even as AI becomes cheaper and commoditized, mainstream companies may have a hard time using the technology to boost financial results.<\/p>\n
\u201cAI may be a great calculator, but in business, intelligence is mostly judgment,\u201d he wrote. \u201cJudgment depends on context, and the answer varies with which human or which model you ask. Perhaps most importantly,\u00a0AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness, all of which shape reputational risk and ultimately drive revenue growth and profit margins.\u201d<\/p>\n
His series of notes came as AI-related stocks tumbled, especially chip names, with traders doubting how much longer the capital expenditure orgy can go on. A handful of hyperscalers plan to spend an estimated $800 billion this year, with capex next year seen topping $1 trillion. <\/p>\n
But AI companies may find that raising all that capital won\u2019t be as easy. Meta has already issued a lot of debt, and announced this week the issuance of a new class of shares, in part to help CEO Mark Zuckerberg pay for a possible wealth tax in California. <\/p>\n
With the social media giant planning to spend $135 billion-$145 billion this year, the cost of insuring Meta\u2019s debt against default \u200btouched a record on Thursday. Five-year credit default swaps widened 7.6 basis points to an all-time high of \u200b114.79 basis points.<\/p>\n
At the same time, smaller AI companies like \u201cneoclouds\u201d have come under pressure. For instance, CoreWeave stock has crashed more than 30% this month, and its five-year credit default swaps have shot up to 1,145 basis points.<\/p>\n
The worries don\u2019t end there. S&P\u2019s Global Head for Digital Infrastructure Mark Habib flagged \u201cinterconnected financing structures\u201d between hyperscalers and data center projects or smaller AI companies.<\/p>\n
\u201cIt is \u2060safe to assume that there is more (debt) out there that we are not seeing,\u201d he \u200bsaid during a roundtable in London, according to Reuters.<\/p>\n
\u201cIf it\u2019s not reported, then it\u2019s not part of the disclosure \u200bby the hyperscalers. Also, if we are not rating the transactions where this liability may accrue, then the fact of the matter is that we might not have the visibility.\u201d<\/p>\n<\/div>\n
Apollo Chief Economic Torsten … <\/p>\n","protected":false},"author":1,"featured_media":7458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2530,113,4281,3952,4873,2646,2873,1544,440,91,1494,1755,10509],"class_list":["post-7457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-bond","tag-bonds","tag-bull","tag-case","tag-core","tag-economic","tag-flaw","tag-heres","tag-spending","tag-stock","tag-tech-stocks","tag-trades","tag-unravel"],"yoast_head":"\n
Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vaultinsider.top\/?p=7457\" \/>\n<meta property=\"og:locale\" content=\"zh_CN\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News\" \/>\n<meta property=\"og:description\" content=\"Apollo Chief Economic Torsten …\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vaultinsider.top\/?p=7457\" \/>\n<meta property=\"og:site_name\" content=\"Finance News\" \/>\n<meta property=\"article:published_time\" content=\"2026-10-24T20:00:48+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"\u4f5c\u8005\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"\u9884\u8ba1\u9605\u8bfb\u65f6\u95f4\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 \u5206\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/#\\\/schema\\\/person\\\/ed40724a3e5d482ce66781a042c3c31e\"},\"headline\":\"Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel\",\"datePublished\":\"2026-10-24T20:00:48+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457\"},\"wordCount\":779,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.vaultinsider.top\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/GettyImages-2300875245-e1792865618919.jpg\",\"keywords\":[\"bond\",\"bonds\",\"Bull\",\"case\",\"core\",\"economic\",\"flaw\",\"Heres\",\"spending\",\"stock\",\"tech stocks\",\"trades\",\"unravel\"],\"articleSection\":[\"Finance News\"],\"inLanguage\":\"zh-Hans\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457\",\"url\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457\",\"name\":\"Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.vaultinsider.top\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/GettyImages-2300875245-e1792865618919.jpg\",\"datePublished\":\"2026-10-24T20:00:48+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/#\\\/schema\\\/person\\\/ed40724a3e5d482ce66781a042c3c31e\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#breadcrumb\"},\"inLanguage\":\"zh-Hans\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"zh-Hans\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#primaryimage\",\"url\":\"https:\\\/\\\/www.vaultinsider.top\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/GettyImages-2300875245-e1792865618919.jpg\",\"contentUrl\":\"https:\\\/\\\/www.vaultinsider.top\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/GettyImages-2300875245-e1792865618919.jpg\",\"width\":1200,\"height\":600},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/?p=7457#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"\u9996\u9875\",\"item\":\"https:\\\/\\\/www.vaultinsider.top\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/#website\",\"url\":\"https:\\\/\\\/www.vaultinsider.top\\\/\",\"name\":\"Finance News\",\"description\":\"Just another Finance News site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.vaultinsider.top\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"zh-Hans\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.vaultinsider.top\\\/#\\\/schema\\\/person\\\/ed40724a3e5d482ce66781a042c3c31e\",\"name\":\"admin\",\"url\":\"https:\\\/\\\/www.vaultinsider.top\\\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.vaultinsider.top\/?p=7457","og_locale":"zh_CN","og_type":"article","og_title":"Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News","og_description":"Apollo Chief Economic Torsten …","og_url":"https:\/\/www.vaultinsider.top\/?p=7457","og_site_name":"Finance News","article_published_time":"2026-10-24T20:00:48+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"\u4f5c\u8005":"admin","\u9884\u8ba1\u9605\u8bfb\u65f6\u95f4":"4 \u5206"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.vaultinsider.top\/?p=7457#article","isPartOf":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457"},"author":{"name":"admin","@id":"https:\/\/www.vaultinsider.top\/#\/schema\/person\/ed40724a3e5d482ce66781a042c3c31e"},"headline":"Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel","datePublished":"2026-10-24T20:00:48+00:00","mainEntityOfPage":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457"},"wordCount":779,"commentCount":0,"image":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457#primaryimage"},"thumbnailUrl":"https:\/\/www.vaultinsider.top\/wp-content\/uploads\/2026\/10\/GettyImages-2300875245-e1792865618919.jpg","keywords":["bond","bonds","Bull","case","core","economic","flaw","Heres","spending","stock","tech stocks","trades","unravel"],"articleSection":["Finance News"],"inLanguage":"zh-Hans","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.vaultinsider.top\/?p=7457#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.vaultinsider.top\/?p=7457","url":"https:\/\/www.vaultinsider.top\/?p=7457","name":"Here's the 'core economic flaw' in the AI bull case as stock and bond trades unravel - Finance News","isPartOf":{"@id":"https:\/\/www.vaultinsider.top\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457#primaryimage"},"image":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457#primaryimage"},"thumbnailUrl":"https:\/\/www.vaultinsider.top\/wp-content\/uploads\/2026\/10\/GettyImages-2300875245-e1792865618919.jpg","datePublished":"2026-10-24T20:00:48+00:00","author":{"@id":"https:\/\/www.vaultinsider.top\/#\/schema\/person\/ed40724a3e5d482ce66781a042c3c31e"},"breadcrumb":{"@id":"https:\/\/www.vaultinsider.top\/?p=7457#breadcrumb"},"inLanguage":"zh-Hans","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.vaultinsider.top\/?p=7457"]}]},{"@type":"ImageObject","inLanguage":"zh-Hans","@id":"https:\/\/www.vaultinsider.top\/?p=7457#primaryimage","url":"https:\/\/www.vaultinsider.top\/wp-content\/uploads\/2026\/10\/GettyImages-2300875245-e1792865618919.jpg","contentUrl":"https:\/\/www.vaultinsider.top\/wp-content\/uploads\/2026\/10\/GettyImages-2300875245-e1792865618919.jpg","width":1200,"height":600},{"@type":"BreadcrumbList","@id":"https:\/\/www.vaultinsider.top\/?p=7457#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"\u9996\u9875","item":"https:\/\/www.vaultinsider.top\/"},{"@type":"ListItem","position":2,"name":"Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel"}]},{"@type":"WebSite","@id":"https:\/\/www.vaultinsider.top\/#website","url":"https:\/\/www.vaultinsider.top\/","name":"Finance News","description":"Just another Finance News site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.vaultinsider.top\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"zh-Hans"},{"@type":"Person","@id":"https:\/\/www.vaultinsider.top\/#\/schema\/person\/ed40724a3e5d482ce66781a042c3c31e","name":"admin","url":"https:\/\/www.vaultinsider.top\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/posts\/7457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7457"}],"version-history":[{"count":0,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/posts\/7457\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=\/wp\/v2\/media\/7458"}],"wp:attachment":[{"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vaultinsider.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/10\/token-spending-102426_db36c8-e1792870321655.png?format=webp&w=1440&quality=75\"\/)
<\/div>\n<\/figure>\n