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AI storm · research and a paper portfolio

The debt behind the AI boom, read every evening

The AI build-out is financed more and more with debt. Here we read where the stress sits, who holds the debt and what history says; a paper portfolio of option insurance, with fixed public rules, keeps us honest.

Research and education, not financial advice: nothing here tells anyone what to buy or sell.

The live portfolio, the AI forecasts and the tests on history are for Pro subscribers. Subscribe.

Market

The market we watch

Last price, change on the day and distance from the one-year high.

US Treasury yields

Yield by maturity, today and a month ago.

Fear and the real economy

Context only, it never triggers a trade. Change against a month ago.

The AI stocks, layer by layer

Last year, 100 a year ago, weekly close; each layer is the equal-weight average of its stocks, against the S&P 500. Chips: Nvidia, AMD, Broadcom, TSMC, ASML, Micron, SK Hynix, Arm, Marvell. Hyperscalers: Microsoft, Alphabet, Amazon, Meta, Oracle. Neoclouds and servers: CoreWeave, Nebius, IREN, Supermicro, Dell, Arista. AI software: Palantir, ServiceNow, Salesforce, Snowflake.

Where each AI stock stands

The 24 AI stocks we follow are — below their one-year high on average. The layer furthest from its high is — (—), the closest — (—).

Change over one and three months and distance from the one-year high. SK Hynix trades in Seoul, in won.

The AI debt

Pro

Map of the AI debt

Billions of dollars, from the latest filings with the SEC; for OpenAI and Anthropic, which are not listed, from prospectuses and the press. Free cash is operating cash minus capital spending, over the period shown. The numbers are re-read from the SEC every evening after a new quarterly report; a model reads the filing for the leases already signed but not yet on the balance sheet, mostly data centres, the largest hidden commitment of the build-out. Type, rating, risk and notes are written by Claude, a model made by Anthropic.

Who holds the AI debt, and who pays if it breaks

The risk does not stay with the companies building the data centres. It ends up with those who need long, safe yields: pension funds and life insurers. It gets there by three roads: long bonds, where the hyperscalers are now over a fifth of the index; private credit; and off-balance-sheet vehicles such as Meta's Hyperion. Vanguard and BlackRock mostly manage clients' money: they lose fees, the real losses fall on savers. Blackstone is the most exposed on its own account, because it owns and finances data centres.

From public sources of September and October 2026. The figures measure different things (total private credit, data-centre portfolios, index weights), so they do not add up. How much data-centre debt pension funds hold is published by no one: it is the most opaque point.

  • Fund by fund: how much AI debt the big bond funds hold

    From the latest public N-PORT filing of each fund with the SEC: the full list of holdings at the end of a quarter month, published about 60 days later, read every week.…

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Pro sections: the AI analyses and the tests on history are for subscribers.

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Bubbles and energy

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Four bubbles lined up at their peak

AI is — months past the peak, at —. At the same month the Nasdaq Telecom stood at —, the Nasdaq at —, the railroads at —. Three years after its peak the Nasdaq Telecom was worth —.

Each curve is 100 in the month of its high; five years before on the left, three years after on the right. US railroads: index of railroad stocks 1857-1929 (NBER, Macaulay 1938). Dot-com: Nasdaq. Cables and telecom: Nasdaq Telecom, the index of the companies that laid the fibre. AI: the US chip index (SOX), at its June 2026 high for now.

Before the peak AI tracks the Nasdaq and telecom almost evenly, but the final climb was steeper than both. After the peak it falls in step with cables and telecom, the bubble in which suppliers financed their customers and the debt sat with those building the network, as today. The railroads are the useful exception: after their 1909 high they did not crash, they stayed flat for years, because they were companies that collected cash. That is the open question about AI: how much of the revenue is real cash.

  • Power for AI against chips, utilities and oil

    Last year, 100 a year ago, weekly close. Power for AI: average of Vistra, Constellation, Talen, GE Vernova, Vertiv, Cameco and Oklo.

  • The AI electricity trade

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Live data for subscribers. Without a subscription you see it 7 days late, once the first week of evening data exists.

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Portfolio

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  • Systemic storm signals

    Each leg has 1,000 euro: half goes in at once, the other half when 2 of the 4 market signals are on. Leg C also completes on a single manual signal: a rating cut at…

  • Portfolio value

    Euro, one point per evening check. The dashed line is the starting capital.

  • The three legs

    Put spreads: buy a put and sell a lower one. The most you can lose is what you paid, the most you can win is the gap between the two strikes. Values in dollars.

  • Trade diary

    Every entry, exit, expiry and rule change, newest first.

AI storm Pro

Live data for subscribers. Without a subscription you see it 7 days late, once the first week of evening data exists.

Subscribe from 12 euro a month  or sign in

Research

Pro
  • The market regime, read by a model

    A hidden Markov model with three states, fitted on weekly data since 2000: chips (SOX), a junk bond fund (Vanguard VWEHX) and the VIX. The states are named by their…

  • From the edge to the centre: who peaked first

    For each AI layer, the median date of its stocks' own highs of the last two years (so it does not depend on how a layer index is built); for the past bubbles, the high…

  • Can an AI forecast the next month?

    Five models try to forecast the next 20 trading days of chips, junk bonds and the S&P 500: the "always up" baseline, momentum (last month repeats), a regression on 17…

  • What TimesFM says today about chips

    Last 60 days and the next 20 trading days. The dashed line is the middle value, the band is where the model puts the price 8 times out of 10. At the forward test on…

  • What TimesFM says today about junk bonds

  • TimesFM and Chronos forecasts at 20 days

    Expected change from the last close: middle value and the two ends of the band where each model puts the price 8 times out of 10. Chronos is recomputed every evening…

  • Had we started a week earlier, on 23 October

    Real closing prices day by day. Options are estimated with the same model as the projection, calibrated on the CBOE quotes of 30 October, because historical option…

  • When insurance is worth buying

    Every trading day since 1995 as a possible purchase, each leg held for 73 days like the real window to 15 February. Five entry rules chosen on 1995-2010 and checked…

  • What 1,000 euro would make if the coming months repeated the past

    The portfolio, with its rules, replayed to 15 February 2027 (the closing date) on the markets of 10 historical moments: the 5 cases since 1994 when chips had crashed…

  • Three fixes to the rules, tested

AI storm Pro

Pro sections: the AI analyses and the tests on history are for subscribers.

Subscribe from 12 euro a month  or sign in

Paper portfolio: no real orders. Option prices are real CBOE quotes delayed 15 minutes: value at the mid price between bid and ask, entries and exits half way between the mid and the full price, like a realistic limit order. Stock prices from Yahoo Finance.

Fixed rules: half banked when a leg doubles, then the rest closes if it falls 40% from its peak; everything closed at 80% of the maximum payoff, if the chip index gets back to its one-year high (thesis wrong) and in any case on 15 February 2027. No leg is bought when it costs more than 40% of the maximum payoff. Since 31 October there is no entry on a chip rebound alone.

Research and education, not financial advice: nothing here tells anyone what to buy or sell.