Brighton, September 14 (HNA) – It is emphasised that the global financial markets are reaching the end of the abundance of capital and savings, and that a turning point has been reached, particularly regarding the capital required for artificial intelligence. Whilst a report by Bridgewater Associates states that one trillion dollars will be required to finance artificial intelligence next year, a report by Oxford Economics indicates that the era of global savings abundance is coming to an end, and that investors will no longer be able to find capital as plentiful and cheap as before.
In a research note authored by Greg Jensen, Co-Chief Investment Officer at Bridgewater Associates – the world’s largest hedge fund, founded by the renowned ‘legendary’ investor Ray Dalio – it is emphasised that the most critical period for capital in the AI markets has begun and that OpenAI will consume a substantial amount of cash during its initial public offering (IPO) in early 2027. Greg Jensen says, “This will be difficult to achieve, and it is something that is necessary to deliver on what has been priced into the equity markets.”
Bridgewater Associates’ report warns that the AI infrastructure boom must rapidly transition from speculative financing to self-sustaining revenue, whilst highlighting a growing funding gap for US data centres.
The report issues the following warning:
“$567 billion flowed into the ecosystem in 2025. Of this, 62 per cent came from cash flows generated by companies within the ecosystem, whilst $214 billion came from outside the ecosystem. $643 billion in capital is required this year, and we believe this could prove challenging; you have managed to finance the first half to some extent, but more will be needed in the second half. This is already a critical period, and next year, $1 trillion will be required.”
Oxford Economics’ report…
In the report titled “The End of the Global Savings Glut”, published in early September by the global macroeconomic research and consultancy firm Oxford Economics, it is emphasised that the era of “global savings glut”—which has dominated financial markets since the 2008 Global Financial Crisis and fuelled a decades-long bull market in bonds—has reached its peak and is now coming to an end.
The report states that we are entering an era in which investors will no longer be able to find capital as plentiful and cheap as before, and will therefore demand a higher term premium on long-term bonds.
Key points from the report are as follows:
Oxford Economics emphasises that the three forces driving the savings glut have dissipated. These three forces are:
1- The end of fiscal austerity policies, high public spending and growing budget deficits…
2-The completion of the deleveraging process in the US; household and corporate spending and borrowing trends are on the rise again.
3-The savings surplus created by China’s export of cheap goods and capital to the world has begun to be curbed due to rising protectionism and trade tariffs in the Western world.