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Issue 2 · Week to Friday 30 October 2026

Large cloud companies reported strong sales as debt worries grew at smaller AI firms

This week's ratings by layer. Each square is one rating: financing, demand, supply, valuation, technology

In this issue (10 sections)
  1. This week in brief
  2. The seven questions
  3. Where the stress is
  4. What happened
  5. Wins
  6. Bull and bear cases
  7. Warning signs
  8. Coming up
  9. Sources
  10. Method
This week in brief

AI demand stayed strong, and lenders became more cautious with smaller cloud firms

Strong cloud results and long-term memory orders point to real demand for AI computing. The strain is mainly with smaller, heavily indebted cloud firms, while the largest companies can still raise money.

Growth Microsoft and Amazon reported fast growth in their cloud businesses12. Coverage of Anthropic's draft listing papers reports fast-growing sales3. Memory makers say their supply is sold out for years4, and renting Nvidia's older H100 chip still costs well above the warning level5.

Risk Meta and Microsoft turned to investors for new shares and bonds to help pay for AI spending67. Debt investors grew more worried about CoreWeave, and the cost of insuring its debt rose sharply8. Alphabet's results revived concern about AI spending, and early trading pointed to lower US share prices9.

Nebius reports its results on 12 November10, which will show how heavily indebted cloud firms are paying for their growth. Demand looks likely to hold over the next few months, and funding for heavily indebted cloud firms is less certain.

Key numbers

Extra interest paid by riskier US companies
3.26%
up 0.48 points since 4 May 2026
Federal Reserve Bank of St Louis · 29 October 2026
Hourly rent for one of Nvidia's H100 AI chips
US$3.03
little changed since 25 October 2026
Ornn compute price index · 30 October 2026
Nvidia share price
US$204.64
down 1% since 24 July 2026
Market data · 30 October 2026
CoreWeave share price
US$54.87
down 24% since 24 July 2026
Market data · 30 October 2026
TSMC sales each month, in New Taiwan dollars
NT$511.9 billion
up 23% since 31 May 2026
Taiwan Stock Exchange filings · 30 September 2026
The seven questions

The chance of each outcome

Compared with issue 1, the largest moves were falls in the chance that a physical shortage delays AI projects and in the chance that AI revenue outgrows AI spending. The chances of a large AI debt default and of a top lab raising money at a lower value also fell. Issue 1 was a trial made with an earlier process, so part of each change comes from the method rather than the evidence.

The words follow a fixed scale: very unlikely is 5 to 20%, unlikely 20 to 45%, roughly even 45 to 55%, likely 55 to 80% and very likely 80 to 95%. How the chances are estimated is under "How this issue was made".

AI spending plans cut by 15%. Will Microsoft, Amazon, Alphabet, Meta, Oracle, CoreWeave and Nebius cut their combined forecast of spending on AI data centres, chips and equipment by 15% or more from its peak? The peak is the highest combined forecast for the next 12 months that they have given since the start of 2026.
6 months8% very unlikely · up 3 points from the last issue
12 months16% very unlikely · up 2 points from the last issue
24 months32% unlikely · no change from the last issue
Microsoft's reported trim to its spending forecast is small11, and Amazon and Oracle still plan large AI spending212.
US$5 billion AI debt trouble. Will an AI lab, a specialist AI cloud company or a data centre developer (or a company one of them set up to borrow for a project) get into debt trouble involving US$5 billion or more? Debt trouble means a missed payment, a debt swap that leaves lenders with less, lenders waiving a broken loan condition, or a forced sale of assets.
6 months13% very unlikely · down 4 points from the last issue
12 months26% unlikely · down 7 points from the last issue
24 months40% unlikely · down 12 points from the last issue
CoreWeave's bonds trade well below their face value138, but no report of a default appeared in this week's evidence, and Nebius still raised new funding14.
Nvidia's data centre sales fall twice. Will Nvidia's revenue from its data centre business fall two quarters in a row, with each quarter lower than the one before?
12 months8% very unlikely · up 2 points from the last issue
24 months22% unlikely · no change from the last issue
Nvidia is expanding production of its next chip, Rubin15, and reports that its order book is full16.
Top AI lab's value or plans slip. Will OpenAI, Anthropic or xAI raise money or list its shares at a value no higher than at its last funding round, or cut the computing capacity it has promised to buy?
6 months15% very unlikely · down 5 points from the last issue
12 months28% unlikely · down 12 points from the last issue
Reports put Anthropic's possible listing value far above the value of its last private round1718.
Shortages delay AI projects six months. Will a shortage of something physical, such as power, memory, chip packaging or materials, delay announced AI projects by two quarters (six months) or more? It counts if the delay affects 5 gigawatts or more of announced data centre capacity, or the shipments of one of the three biggest AI chip suppliers.
12 months36% unlikely · down 20 points from the last issue
Microsoft withdrew from one British project amid reported power delays19, and this case is far smaller than the scale this question requires.
AI revenue outgrows AI spending. Over the next four quarters, will revenue from AI grow faster than spending on AI data centres, chips and equipment by Microsoft, Amazon, Alphabet, Meta, Oracle, CoreWeave and Nebius? The revenue counted comes from AI labs, companies whose main product is built on AI, and the big cloud companies' AI services.
12 months49% roughly even · down 16 points from the last issue
Cloud sales are growing fast12, and spending on data centres and chips is also rising fast20, so the two growth rates look close to even.
AI keeps improving at its recent pace. Will the best AI models keep improving at their recent pace, meaning the top score on the Epoch Capabilities Index (an independent measure of what AI models can do) rises 12 points or more over 12 months? It rose from 150.6 to 168.8 in the 12 months to October 2026.
6 months63% likely · down 2 points from the last issue
12 months63% likely · down 7 points from the last issue
No new score for the best AI models arrived this week, so this chance rests on the pace measured before this week.
Where the stress is

Ratings by layer of the supply chain

Each part of the supply chain is rated on five things. Red means a problem now, amber means a risk to watch, green means no concern this week. The arrow shows the direction of change: ↑ getting worse, ↓ improving, → steady. For valuation, improving means prices moved closer to what the business earns.

In the ratings, shortages of memory, chip packaging, power and grid connections are a serious problem in most parts of the supply chain. Financing is rated as getting worse in half of the chain, mainly at specialist AI cloud companies and data centre developers. Capital markets are rated a serious problem, with large new bond and loan deals721 and a high interest rate on SpaceX's new debt22.

LayerFinancingDemandPhysical supplyValuationTechnology effect
AI labs and appsWatch ↑OK ↓Problem ↑Watch ↑OK ↓
Cloud companiesWatch ↑OK ↓Watch ↑Problem ↑Watch ↓
Data centre developersWatch ↑Watch →Problem ↑Problem ↑Watch →
Power and gridWatch →Watch ↑Problem ↑Watch →Watch →
Cooling, racks and serversWatch →Watch →Problem ↑Watch ↓OK ↓
NetworkingWatch ↑Watch ↓Watch →Watch ↑Watch →
Chips and memoryWatch →OK ↓Problem ↑Watch ↑Watch →
Chipmaking and packagingOK →OK ↓Problem ↑Watch ↑OK ↓
Materials and circuit boardsWatch →Watch →Problem ↑Watch →Watch →
Shipping and tradeWatch ↑Watch ↓Problem ↑Watch ↑Watch ↓
Capital marketsProblem ↑Watch →Watch ↑Problem ↑Watch →
AI models and adoptionWatch ↑OK ↓Problem ↑Watch ↑OK ↓
Problem nowWatchNo concern
What happened

The week's main developments

Each item shows how well it is supported. confirmed means an official source such as a filing or an exchange release. corroborated means two or more independent reports. reported means one credible report. The coverage bar shows how news outlets framed the story: Growth the build-out is working, Risk overinvestment or financial strain, Neutral facts without a lean. Each outlet counts once.

Anthropic filed to list its shares, and reports disagree on its computing commitments

Anthropic filed draft listing papers to list on the Nasdaq exchange and reported US$16.3 billion of revenue for a half-year23. One report on the filing puts its agreed computing purchases at US$430 billion24, and another puts them at US$800 billion through 204525. The two totals may measure different things, and the reports do not explain the difference. Reports put the possible listing value at about US$1.9 trillion17, compared with US$965 billion at its last private round18.

reportedprokerala.com [23] · Google News [24] · Google News [25] · Google News [17] · CNBC [18]

Commitments this far above revenue mean the lab must keep growing revenue fast or keep raising money to pay for them.

Coverage 37 outlets · 8 growth · 16 neutral · 13 risk

Microsoft and Amazon reported fast cloud growth, and Alphabet shares fell

Microsoft reported that its cloud business grew 48% from a year earlier1, and Amazon's cloud sales rose 39% from a year earlier in the July to September quarter2. Alphabet's quarterly revenue rose 25% to US$125.6 billion26, and its share price fell from US$320.21 on 23 October to US$279.84 on 30 October27. Amazon shares also fell after it forecast lower fourth-quarter sales than analysts expected and reported high cash spending28. Reports said Microsoft cut its forecast of 2026 AI spending by US$5 billion, to US$170 billion11.

reportedGoogle News [1] · infotechlead.com [2] · Google News [26] · Yahoo Finance [27] · thestar.com.my [28] · businessinsider.com [11]

These results point to strong paying demand for AI computing at the largest cloud companies.

Coverage 22 outlets · 4 growth · 2 neutral · 16 risk

Meta and Microsoft raised money from investors to help pay for AI spending

Meta plans to sell US$95 billion of shares to fund AI spending6 and filed the terms of share sales during the week29. Microsoft sold US$25 billion of bonds7. Nvidia and Meta announced a US$3 billion investment deal30.

reportedGoogle News [6] · US company filing [29] · Google News [7] · deccanchronicle.com [30]

Two of the largest buyers of AI equipment now fund part of their AI spending with new bonds and shares, although both can still raise money easily.

Coverage 52 outlets · 6 growth · 4 neutral · 42 risk

Debt investors became more worried about CoreWeave and Nebius

The cost of insuring CoreWeave's debt against default doubled8, and its bonds due in 2031 and 2032 trade as low as 76.5 cents per dollar owed13. Shares of CoreWeave and of the data centre company IREN have fallen past Froth Watch's warning level. Nebius's chief executive said some sources of funding are unavailable for now31, although Nebius also arranged US$3.5 billion of financing from Citi32.

reportedGoogle News [8] · investinglive.com [13] · Google News [31] · Google News [32]

A large default in AI infrastructure is more likely at a cloud firm with heavy debt than at the largest companies.

40608010012024 Jul 2611 Sep 2630 Oct 26DateUS dollars, daily close
CoreWeave share price. Source: Market data
Coverage 26 outlets · 4 growth · 6 neutral · 16 risk

Memory makers said supply is sold out for years, and packaging prices are rising

SK hynix is reported to say its memory supply is effectively sold out through 20294. It has also signed long-term contracts for more than half of its 2027 and 2028 capacity33. TSMC is reported to be raising prices for advanced chip packaging by up to 20%34.

corroboratedGoogle News [4] · Google News [33] · Google News [34]

Long-term orders point to real demand, and higher component prices raise the cost of each unit of computing that buyers install.

Coverage 20 outlets · 4 growth · 11 neutral · 5 risk

Microsoft withdrew from a British data centre project amid power supply delays

Microsoft was reported to have withdrawn from Nscale's data centre deal in Britain amid power supply delays19. The British firm Argyll warned that the wait for a grid connection is delaying AI projects in Britain35. In the United States, Arizona officials rejected a 3,000-acre data centre plan36.

reportedGoogle News [19] · Google News [35] · timesofindia.indiatimes.com [36]

Power supply and planning approvals now limit where and how fast data centres can be built.

Wins

Evidence that the build-out is working

OpenAI's spending showed up as revenue at Microsoft

Microsoft reported recording US$10 billion of revenue from OpenAI37. This suggests spending by an AI lab is arriving as sales at a cloud company.

The report does not say over what period the revenue was earned or which services it came from.

Rental prices for older Nvidia AI chips stayed high

Renting Nvidia's older H100 chip cost US$3.03 an hour on 30 October5, well above the level at which the warning sign would trigger. The A100, the generation before the H100, rented for US$1.08 an hour on the same day38.

These are today's rental prices only, and no prices agreed now for future dates are available to show what renters expect to pay next year.

Lenders agreed large financing deals for chips and data centres, and no deal was withdrawn

SpaceX agreed US$40 billion of financing with Apollo39, reported to be for a lease of Nvidia AI chips40. SpaceX kept a strong credit rating, above the level for riskier junk debt40. Broadcom secured US$63 billion from banks to finance its AI computing sales to Anthropic41, and IREN secured US$363 million of equipment financing42.

The 8.75% interest SpaceX is reported to pay on its deal22 is a high rate for a borrower with a strong credit rating.

Equipment suppliers reported large orders tied to AI data centres

Generac reported US$4.5 billion of signed orders not yet delivered for AI power equipment, including a deal with Amazon43. Celestica, which builds network and server equipment, reported a sharp rise in revenue tied to AI data centre demand and gave a sales outlook of US$40 billion for 202744.

Signed orders and outlooks show planned spending, and orders can still be delayed or cancelled before delivery.

Bull and bear cases

The case for and against

The case that the boom lasts

The cloud results from Microsoft and Amazon show that customers are paying for AI computing now12. Memory makers report supply sold out for years, and equipment suppliers report large signed orders443. Lenders agreed large financing deals for chips and data centres this week4139, and no withdrawn deal appeared in this week's evidence. Funding problems sit mainly with a few heavily indebted cloud firms, and the largest companies can still raise money.

The case that it is a bubble

Anthropic's computing commitments are many times its reported revenue2324. Meta's planned share sale and Microsoft's bond sale mean outside investors now fund part of the largest buyers' AI spending67. CoreWeave's bonds trade well below their face value13, and SpaceX, a company with a strong credit rating, pays a high interest rate on its chip financing2240. The extra interest on US junk bonds stood at 3.26% on 29 October45, above the warning level.

Warning signs

What would trigger an immediate alert

Four warning signs have triggered, for AI shares as a group, for CoreWeave and IREN shares, and for the extra interest on US junk bonds. Nebius shares are just short of their warning level, and Nvidia shares have fallen about three-quarters of the way to theirs.

These measures are checked every 30 minutes, and an alert goes out as soon as one crosses its trigger.

Warning sign and why it mattersLatestTriggerStatus
The extra interest on US junk bonds rises by 0.75 percentage points or more within 20 trading days.
A quick rise in the extra interest that riskier companies pay shows lenders are getting nervous, and heavily indebted AI companies would find it harder and more expensive to borrow.
up 0.23 pointsup 0.75 pointsNot triggered, Thursday 29 October
The extra interest on bonds from US companies with strong credit ratings rises by 0.25 percentage points or more within 20 trading days.
If even the safest companies have to pay more to borrow, the big cloud companies that now sell bonds to pay for data centres would face higher costs too.
up 0.07 pointsup 0.25 pointsNot triggered, Thursday 29 October
The extra interest on US junk bonds is higher than on 90% of the last 252 trading days.
When the extra interest on riskier debt is near the top of its range for the past year, heavily indebted AI companies find it harder and more expensive to raise money.
3.26%3.18%Triggered, Thursday 29 October
AI shares as a group fall 20% or more below their high of the last 60 trading days.
A broad fall in AI share prices makes it harder and more expensive for AI companies to raise money, and it can lead them to cut their spending plans.
down 20.2%down 20%Triggered, Friday 30 October
CoreWeave, Nebius, Oracle or IREN shares fall 40% or more within 20 trading days.
These companies rely most on borrowed money to build AI data centres, so a sharp fall in their shares can be an early sign that they will struggle to pay for them.
CoreWeave down 40.2%
IREN down 42.6%
Nebius Group down 38.3%
Oracle down 9.7%		down 40%CoreWeave triggered
IREN triggered
Nebius Group not triggered
Oracle not triggered
Nvidia shares fall 20% or more below their high of the last 252 trading days.
Nvidia supplies most AI chips, so a large fall in its shares shows investors are less sure that AI spending will keep growing.
down 14.5%down 20%Not triggered, Friday 30 October
Renting one of Nvidia's H100 AI chips costs less than US$2.00 an hour.
Below this price, renting out these chips may not earn enough to justify spreading their cost over five to six years, which is what their owners' accounts and loans assume.
US$3.03US$2.00Not triggered, Friday 30 October
Sales growth at Taiwan's AI suppliers slows by 20 percentage points or more from one month to the next.
Taiwanese companies make many of the chips, parts and servers for AI data centres and report sales every month, so a sudden slowdown there is one of the earliest signs that orders are falling.
2.78 points20.00 pointsNot triggered, Wednesday 30 September
Four or more of Taiwan's AI suppliers sell less in a month than a year earlier.
When several of these suppliers sell less than a year earlier at the same time, the fall is more likely to be in AI orders as a whole than at one company.
nonefourNot triggered, Wednesday 30 September
Events that would also trigger an alert (9)
  • The price of CoreWeave's bonds due in 2031 and 2032 falls below 70 cents per dollar owed, a level that shows investors fear they will not be repaid in full.
  • A specialist AI cloud company that Froth Watch tracks tells US regulators that something, such as a missed payment, has made its debt due for repayment early.
  • A major credit rating agency cuts Oracle's rating to junk.
  • The yearly cost of insuring Oracle's debt against default over five years rises above 4% of the amount insured.
  • Anthropic postpones its IPO.
  • Anthropic's shares trade 20% or more below their IPO price within 30 days of listing.
  • A bond deal backed by data centre loans or rents, or a loan to a company set up to fund a single data centre project, is pulled before it closes.
  • China's Ministry of Commerce publishes any announcement about the two export rules it has paused.
  • GE Vernova, one of the largest makers of gas turbines, reports that cancelled turbine reservations outnumbered new ones.
Coming up

Dates to watch, and what each result would mean

DateEventResult that would worryResult that would reassure
Thursday 12 NovemberNebius reports its quarterly results10.Higher borrowing costs or delayed projects would add to concern about heavily indebted cloud firms.New funding and firm customer contracts would ease concern about debt at these firms.
Sources

Where the figures come from

  1. Azure Accelerates to 48% as Microsoft Free Cash Flow Beats Estimates by $10B. Google News · 30 October 2026
  2. Amazon Q3 2026 Revenue Jumps 12% to $201.9 Billion, AWS Cloud Sales Surge 39% as AI Capex Reaches $220 Billion. infotechlead.com · 30 October 2026
  3. Anthropic's soaring sales, steep losses put AI frenzy to IPO test. itnews.com.au · 27 October 2026
  4. SK Hynix: DRAM and HBM Supplies 'Effectively Sold Out' for Next Three Years Through 2029. Google News · 28 October 2026
  5. Hourly rent for one of Nvidia's H100 AI chips, 30 October 2026. Ornn compute price index
  6. Meta plans $95 billion stock offering to fuel AI spending despite growing bubble fears. Google News · 26 October 2026
  7. Microsoft Prices $25 Billion Bond Sale as Tech Borrowing for AI Grows. Google News · 30 October 2026
  8. CoreWeave, AI landlord stocks sink to lowest levels in more than a year as the price of insuring CoreWeave's debt doubles. Google News · 26 October 2026
  9. US futures tumble as Alphabet earnings revive AI spending fears, Amazon is next in the firing line. investinglive.com · 29 October 2026
  10. Nebius schedules November 12 results: USD 3.00 billion guidance shapes Nebius stock. Google News · 26 October 2026
  11. Microsoft Cuts 2026 AI Capex Forecast by $5 Billion to $170 Billion. businessinsider.com · 28 October 2026
  12. Oracle Expands Nvidia AI Chip Deal, Adds Google, Cerebras and SambaNova as Capex Targets $95 Billion. infotechlead.com · 28 October 2026
  13. CoreWeave -> Bondholders (2031/2032 notes): debt. investinglive.com
  14. Nebius secures USD 3.5 billion facility: USD 36.8 billion values Nebius stock. Google News · 27 October 2026
  15. Nvidia Expands Vera Rubin Production as AI Demand Surges. Google News · 26 October 2026
  16. Nvidia's Order Book Is Full; Its Delivery Schedule Is Another Matter. Google News · 26 October 2026
  17. Anthropic IPO Filing Puts $1.9 Trillion Valuation in Focus as AI Bubble Concerns Grow. Google News · 27 October 2026
  18. Altimeter, Dragoneer, Greenoaks, Sequoia (leads) -> Anthropic: equity_investment. CNBC
  19. Microsoft Pulls Out Of Nscale's UK Data Centre Deal Amid Power Supply Delays. Google News · 26 October 2026
  20. US company filings data, 30 September 2026. US company filings
  21. Banks Eye $21 Billion of Bonds for Broadcom Chip-Financing Deal. Google News · 28 October 2026
  22. SpaceX faces 8.75% interest costs on $40 billion debt deal as AI spending concerns grow. Google News · 26 October 2026
  23. AI firm Anthropic files for Nasdaq IPO, reports $16.3 billion half-year revenue. prokerala.com · 27 October 2026
  24. Anthropic's IPO filing reveals $430 billion in locked-in AI computing: Chart of the Day. Google News · 26 October 2026
  25. Anthropic locks $800b compute deals through 2045 to dominate AI market. Google News · 27 October 2026
  26. Alphabet Q3 Revenue Rises 25% to $125.6 Billion. Google News · 28 October 2026
  27. Alphabet share price, 30 October 2026. Yahoo Finance
  28. Amazon sinks as AI spending eclipses fastest cloud growth in five years. thestar.com.my · 30 October 2026
  29. Meta Platforms, Inc. 424B5 - 424B5 FORWARD PROSUPP. US company filing · 26 October 2026
  30. Nvidia, Meta Deepen AI Ties With $3 Billion Investment Deal. deccanchronicle.com · 27 October 2026
  31. Nebius CEO Says Company Has Enough To Build Its Gigawatt, But Admits That "Some Of The Capital Sources Are Temporarily Closed". Google News · 26 October 2026
  32. Nebius secures $3.5B from Citi amid sector stre. Google News · 29 October 2026
  33. SK hynix locks long-term deals, secures over half of 2027-2028 capacity. Google News · 28 October 2026
  34. TSMC to raise advanced chip packaging prices by up to 20%, report says. Google News · 27 October 2026
  35. Argyll warns UK AI held back by grid queue as Microsoft exits Nscale site. Google News · 26 October 2026
  36. In 2026, Arizona officials rejected a data-centre plan covering 3,000 acres near Eloy; the developer had already reduced the proposed campus to 11 buildings. timesofindia.indiatimes.com · 27 October 2026
  37. Microsoft recorded $10 billion in revenue from OpenAI. Google News · 28 October 2026
  38. Ornn compute price index data, 30 October 2026. Ornn compute price index
  39. SpaceX seals $40 billion financing deal with Apollo to fuel massive AI infrastructure buildout. Google News · 26 October 2026
  40. SpaceX keeps BBB+ credit rating after $40 billion Nvidia AI chip lease deal. Google News · 28 October 2026
  41. Broadcom secures $63 billion from banks to finance AI compute sales to Anthropic. Google News · 26 October 2026
  42. IREN Secures $363M Equipment Financing from Wingspire to Support AI Compute Expansion. Google News · 29 October 2026
  43. Generac (GNRC) Q3 2026: AI Power Backlog Hits $4.5 Billion With Amazon Deal. Google News · 28 October 2026
  44. Celestica Stock Climbs 8% as AI Data Center Boom Drives 83% Revenue Surge and $40 Billion 2027 Sales Outlook. ibtimes.com.au · 27 October 2026
  45. Extra interest paid by riskier US companies, 29 October 2026. St. Louis Fed
Method

How this issue was made

Froth Watch collects public data every 30 minutes: company filings and results, market and credit prices, chip and server sales, power and data centre news, and how the news was covered. Each week, separate AI models read the evidence for each part of the supply chain and write the issue to a fixed style guide. Each chance is estimated five times, separately, and the middle estimate is published. None of the five estimates sees last week's figure, so each week's chance is based on the current evidence alone. Automatic checks test every figure against its source, a panel of AI reviewers reads the issue as a reader would, and the owner reads and approves every issue before it is published.

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