Wall Street Needs Billions More for AI, While Beijing Warns the Boom Is Starving Other Industries

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Two Warnings From the Same Stage

The remarks came at the Global Financial Leaders' Investment Summit, hosted by the Hong Kong Monetary Authority. The three-day event runs November 2 to 4 under the theme "Rethinking the Playbook". Organizers named AI's financial sustainability, and its effects on productivity, jobs and inflation, as key topics.

Gray argued that the AI industry's appetite for money is far from satisfied. Most major tech companies are expected to raise more capital, he said. He pointed to Meta, Google and Oracle selling shares, SpaceX going public and Anthropic preparing its own listing. On top of that, he said, data centers and the energy to power them require enormous sums.

He said he remains confident in AI infrastructure. His reasoning is that demand is "running well ahead of supply."

The Chinese regulator, Xiao Yuanqi of the National Financial Regulatory Administration, made the opposite case. Money pouring into a few leading tech firms is raising their debt levels and could fuel expansion that is too fast, he said. It also makes borrowing more expensive for traditional industries, which weakens their ability to invest and grow. He urged governments to prepare policies for the financial risks of the AI shift.

Why the Money Question Is Urgent

Nervous markets give the debate its edge. On October 22, the tech-heavy Nasdaq fell 2.6 percent, its worst day since a 4.2 percent drop on June 5. Meta dropped nearly 7 percent after raising its 2026 spending forecast to between $135 billion and $145 billion while its profit fell short of expectations. The Nasdaq now sits about 5.8 percent below its October 6 record.

Market analysts do not agree on the cause. One analyst told Al Jazeera that the swings looked driven more by investor mood than by any real change in the businesses. Others argue that spending on data centers and chips is simply unsustainable. Research firm Gartner forecasts global AI investment of $2.7 trillion this year and $3.6 trillion in 2027.

Meanwhile, the fundraising Gray described is already underway:

• Meta said it aims to raise up to $95 billion, its largest equity offering ever.
• SpaceX agreed a $40 billion deal with Apollo to lease AI chips and servers.
• Anthropic, maker of the Claude AI models, made its IPO filing public on October 26. It reported revenue of about $16.3 billion for the first half of 2026 and a net loss of $80.7 billion, which it largely attributed to a rise in the value of convertible bonds. Reuters reported that investors' valuation talk had slipped from about $2 trillion to about $1.5 trillion within a week.
• Alphabet, Google's parent company, reportedly upsized an earlier share sale to $85 billion.

Is the "Crowding Out" Fear Justified?

Xiao's concern is not only a Chinese one. Analysts in the United States describe the same pattern. Investment commentator Ed Yardeni argued in August that a flood of bonds from AI giants is pulling money away from US Treasuries and pushing government borrowing costs higher. Another recent analysis noted that AI spending is taking a growing share of US economic output while other business investment declines.

Still, it matters who is speaking. China's financial regulators answer to the Communist Party. Caixin reported in June that Xiao has been overseeing the agency's day-to-day work on an acting basis since the Party removed its previous chief in April.

His agency also has a record of stepping hard into tech. In 2020, Xiao warned that financial innovation must not create oligopolies. That came shortly after authorities scuppered a planned $37 billion IPO by Ant Group, days after its founder criticized regulators. Critics of Beijing's approach argue that when the state can halt a listing of that size overnight, investors face political risk that no balance sheet can show.

The contrast is clear. In the US, the AI boom's financing is argued over in open markets, in public filings and in daily share prices. In China, the same debate is steered by officials who answer to the Party.

What to Watch Next

Anthropic's IPO is expected as early as this month and will be an early test of whether investors still want to buy AI shares at today's valuations. OpenAI has filed confidentially and is expected to list by early 2027. Higher bond yields and an oil price above $110 a barrel, tied to the US-Israel war on Iran, add pressure.

If investors keep buying, Gray's view that demand outruns supply gains weight. If the new share sales meet weak interest, the warnings about concentration and crowding out will get louder.

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Sources

1. Reuters, "Blackstone president says more tech sector fundraising ahead to keep up with AI industry growth" (Nov 3, 2026): https://www.reuters.com/business/finance/blackstone-president-says-more-tech-sector-fundraising-ahead-keep-up-with-ai-2026-11-03/
2. Reuters, "AI investment is becoming overly concentrated, Chinese official says" (Nov 3, 2026): https://www.reuters.com/business/finance/ai-investment-is-becoming-overly-concentrated-chinese-official-says-2026-11-03/
3. Al Jazeera, "US tech stocks tumble as investors fret over AI spending" (Oct 23, 2026): https://www.aljazeera.com/economy/2026/10/23/us-tech-stocks-tumble-as-investors-fret-over-ai-spending
4. Reuters (via Arizona Daily Star), "Anthropic IPO filing to put AI investment boom to the test" (Oct 26, 2026): https://tucson.com/news/nation-world/business/article_1344c3c8-7be2-451f-81b9-42719bda8162.html
5. The Standard (Hong Kong), "Finance chiefs to rethink AI playbook, other key themes, at Nov investment summit in HK": https://www.thestandard.com.hk/finance/article/346519/Finance-chiefs-to-rethink-AI-playbook-other-key-themes-at-Nov-investment-summit-in-HK
6. Fortune, "Wall Street used to worry that too much U.S. debt would crowd out the private sector. But AI hyperscalers are 'reverse crowding' the Treasury" (Aug 29, 2026): https://fortune.com/2026/08/29/us-debt-reverse-crowding-out-effect-ai-hyperscaler-bonds-treasury-yields/
7. Business Today, "US AI boom raises crowding out fears: Why Wall Street is worried about debt, borrowing costs" (Oct 31, 2026): https://www.businesstoday.in/world/story/us-ai-boom-raises-crowding-out-fears-why-wall-street-is-worried-about-debt-borrowing-costs-564954-2026-10-31
8. Caixin Global, "Li Yunze removed as head of China's top financial regulator" (Jun 1, 2026): https://www.caixinglobal.com/2026-06-01/li-yunze-removed-as-head-of-chinas-top-financial-regulator-102449679.html
9. Reuters (via Business Standard), "China regulator says financial innovation must not create oligopolies" (Nov 2020): https://www.business-standard.com/amp/article/international/china-regulator-says-financial-innovation-must-not-create-oligopolies-120111400951_1.html
10. Capital Brief, "Meta considers AI equity raise in Google's wake: FT": https://www.capitalbrief.com/briefing/meta-considers-ai-equity-raise-in-googles-wake-aa7cec24-0542-4b30-8a7d-04d809697cca/

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