The International Monetary Fund said rising AI-related borrowing could magnify market losses if investment returns fall short, a risk brought into focus by a 5.5% weekly decline in the Nasdaq 100 through Oct. 16.
The IMF’s October 2026 Global Financial Stability Report listed a potential AI-driven market correction among three major risks, alongside a sharp rise in sovereign bond yields and cyber threats. Large cloud and data center operators accounted for 10% of global investment-grade corporate bond issuance as of July 2026, compared with less than 1% at the end of 2024, the report said. That figure tracks new issuance, not the full stock of outstanding bonds.
The report examined 14 publicly disclosed transactions since 2023 involving about $300 billion in equity investment and $650 billion in debt, linked to $1.4 trillion in future commitments to buy services or chips. The IMF warned that trouble at companies receiving financing could reduce both the value of investors’ stakes and the revenue expected from those companies. In some arrangements, an investor also depends on future purchases by the company it funds, tying the financing to sales.
Nasdaq data show the index closed at 29,187.55 on Oct. 16, down from 30,883.15 on Oct. 9, before recovering to 29,529.34 on Oct. 19. The rebound did not erase the weekly decline or resolve whether AI investment can generate lasting returns.
Nvidia’s latest results show continued data center revenue growth. The company reported $89 billion in data center revenue for its fiscal second quarter ended July 26, 2026, up 117% from a year earlier. Those sales show demand reaching a major chip supplier, but do not measure returns across the full AI investment chain.
Amazon’s release showed AI-related property and equipment spending weighed on its free cash flow. The company reported a $7.6 billion outflow for the 12 months ended June 30, 2026, compared with an $18.2 billion inflow in the prior 12 months. Amazon said increased property and equipment spending, primarily reflecting AI investment, drove the decline.
Meta Platforms forecast $130 billion to $145 billion in 2026 capital expenditures, including principal payments on finance leases. Meta is scheduled to report third-quarter results Oct. 21; Microsoft lists Oct. 28 as its next earnings date, and Amazon has scheduled a results call for Oct. 29.
