Azeem Azhar

In another part of the market, not the equity market, the bond market, we saw similar fear emerging.

The bond market tends to move slightly differently to the equity markets.

But a number of these companies in the AI space are dependent on corporate debt because you're having to raise a lot of money to build out these big data centers.

And so for one example, Oracle's corporate debt took a real hammering down 8% this week.

And the CDS, which is a kind of interesting technical financial instrument, it's the cost to ensure the debt of some of these companies spike.

It got increasingly more expensive.

And that's often a signal that bond investors are a bit nervous about the prospects of those firms.

Now,

In truth, the Nasdaq is still above its 50-day moving average, and this is often just the normal ups and downs, but perhaps it isn't.

Now, the real driver here are the fears that the revenues won't materialize rapidly enough to pay for the AI infrastructure, particularly so for these new firms moving into serving models like Corweave and Oracle.

Now, for revenues to materialize, we need to see people and companies spending more and more in the generative AI ecosystem.

And if companies are going to spend more, they need to be getting something back.

And that is where productivity comes in.

No productivity, no point, no sales, no revenues.

Well, the markets would be right to turn red.

So let's dig into what we can now see from some of the data around productivity three years into this ChatGPT moment.

Well, there's an increasing body of evidence that shows that inside firms, inside teams, with individual workers, AI is making people more productive.

Micron, which is a semiconductor company, it makes the high bandwidth memory as it happens is what you need in these AI data centers, reports 30 to 40% productivity gains when their employees use generative AI for code generation and other internal uses.

So that's a really, really significant number coming from a company that's not one of the big tech firms.

Coinbase, the crypto business, says that AI-generated code is on track to surpass human output.