The AI trade gets a reappraisal

The AI boom is moving into its rational exuberance phase, to adapt a term from the last tech bubble: Investors are pulling back funding and demanding more evidence that their investments will actually pay off.Why it matters: It's a delicate dance. The economy is running on the AI trade right now. Can investors take air out of the bubble without popping the whole damn thing? The big picture: Investors still believe that long-term AI will pay off in big productivity gains — and that's clear from the gains in the stock market — but lately they've toned down the mania.Signs of the retreat are coming from all corners of the AI buildout:Neoclouds are the hardest hit. These are the new players borrowing heavily and using backing from Big Tech companies to build data centers and sell computing power back to those hyperscalers, as part of what many see as the AI circular economy. Bond investors are demanding more compensation to lend to neoclouds — CoreWeave is Exhibit A — as rising interest rates make them look more risky.South Korean neocloud Elice's stock plunged more than 30% in its trading debut Tuesday. In Australia, an Nvidia-backed neocloud called Firmus shelved a planned IPO earli…

≈