"According to The Wall Street Journal, their latest Claude agents can perform autonomous coding and legal work, forcing investors to price in a future where corporate clients can simply bypass traditional SaaS providers. This is a repricing of the terminal value for companies like Salesforce, whose competitive moats are evaporating overnight. This technological leap is forcing hyper-scalers into a ruinous spending war that is spooking even the bond market."
"With Amazon and Microsoft committing to capital expenditure exceeding the GDP of some nations, DBS Group Research notes that momentum trades are unwinding rapidly as investors question the ROI of this $600 billion gamble. The market is waking up to the reality that this AI arms race might burn cash faster than it generates profit amid extreme competition. The rot is spreading from equity into credit markets and creating a dangerous feedback loop for leveraged buyouts."
"The rot is spreading from equity into credit markets and creating a dangerous feedback loop for leveraged buyouts. The Wall Street Journal highlights that software loans, which make up a massive 13% of leveraged loan indices, are trading down as lenders fear these AI disruptions could trigger a wave of defaults. If these stable recurring revenue businesses are disrupted, the collateral underpinning private credit portfolios becomes essentially worthless."
S&P 500 futures fell to a November low amid extreme AI competition, weakening labour data and a resurgent dollar. Anthropic’s Claude agents can perform autonomous coding and legal work, enabling corporate clients to bypass traditional SaaS providers and forcing a repricing of terminal values for major software companies. Hyper-scalers are committing massive capital expenditure, prompting questions about ROI and burning cash amid intense competition. Momentum trades are unwinding and software loans—about 13% of leveraged loan indices—are trading down as lenders fear defaults. Cooling real-economy data reduces support for high valuations and amplifies systemic risk.
Read at London Business News | Londonlovesbusiness.com
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