Goldman's Wheeler Sees 'Generational Opportunity' in AI

Summary

Miriam Wheeler of Goldman Sachs discusses the AI infrastructure buildout as a generational opportunity, with massive capex from hyperscalers driving demand for financing across credit markets. She highlights doubling power needs for data centers, dominance of AI in high yield issuance, and a bifurcation in credit markets where clean stories outperform while software and inflation-sensitive names lag. Sponsor activity is shifting toward hard assets, and software M&A remains stalled.

• AI infrastructure buildout seen as generational opportunity, especially in hard assets and power for data centers.
• Hyperscalers are expected to spend $600 billion on AI capex this year alone.
• Power demand for data centers is projected to double over the next few years.
• AI-related issuance accounts for over 20% of high yield bond market activity.
• Credit markets are bifurcating: clean credit stories trade up, software/inflation-sensitive names trade down.
• Sponsor activity is rotating toward hard assets and infrastructure rather than software.
• Software M&A remains quiet due to a bid-ask gap, but the sector is not considered toxic.
• The market is differentiating based on track record and ability to deliver large projects on time and budget.