AI capex will destroy capital, could trigger major credit event, says Chris Wood

Chris Wood warns that AI capex will destroy capital and trigger a major credit event when the cycle turns.

Hyperscalers are increasingly borrowing to fund AI investment, creating a risk of a major credit event when the downturn comes.

Large language models will become commodities, and the tech stocks selling semiconductor chips are capturing profits upfront, while hyperscalers carry the investment burden.

The easy money in semiconductor stocks has been made, and investors should consider taking profits, as the market may eventually question the sustainability of the AI investment cycle.