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U.S. Treasury Secretary Scott Bessent stated that rising debt yields in the artificial intelligence (AI) sector are not a concern, describing neocloud companies as a minor part of the broader market. This statement follows recent declines in the stock and bond prices of neocloud provider CoreWeave Inc.. <\/p>\n
No Concern Over Tech Borrowing <\/p>\n
Speaking with CNBC’s Brian Sullivan on Wednesday, Bessent addressed questions regarding double-digit yields on AI-related debt. Sullivan asked if the Treasury Secretary was worried about the lower end of the credit spectrum. <\/p>\n
“Look, we, we monitor all of this,” Bessent told CNBC. “I don’t think it’s problematic at all because, you know, we’re seeing that the neo-clouds are a small component of the overall ecosystem.” <\/p>\n
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Bessent further noted that capital continues to flow into the technology sector despite rising borrowing costs. “And we’re still seeing the financing getting done. We’re still seeing the deals get done,” Bessent said. He added that some companies, such as Meta Platforms Inc., are choosing to “finance with equity.” <\/p>\n
CoreWeave Debt Pressures <\/p>\n
Bessent’s comments occurred alongside mounting financial pressure on CoreWeave, an Nvidia Corp.-backed neocloud company. According to last week’s report, the yield on CoreWeave’s $2.75 billion bond maturing in 2031 rose to a record 15.76%. <\/p>\n
Shares of CoreWeave have declined about 44% in the past six months. The stock fell about 6.92% to $59.50 premarket on Thursday. <\/p>\n
Broader Economic Outlook <\/p>\n
During the CNBC interview, Bessent also discussed the broader U.S. economy and the Federal Reserve’s recent decision to leave interest rates unchanged. Bessent expressed his support for Federal Reserve Chair Kevin Warsh. <\/p>\n
Trending: Avoid the #1 Investing Mistake: How Your ‘Safe’ Holdings Could Be Costing You Big Time<\/a> <\/p>\n “I have great confidence in him to find the right balance between the Fed’s dual mandate of full employment and the inflation mandate,” Bessent stated. <\/p>\n While Bessent said the U.S. is currently experiencing an “energy supply shock,” he maintained a positive outlook on immediate economic growth. “I think we’re going to get a strong GDP number for the third quarter,” Bessent said. <\/p>\n How Has the Stock Market Performed? <\/p>\n Story Continues <\/p>\n The S&P 500 index has advanced 13.13% year-to-date. Similarly, the Nasdaq Composite index was up 14.23%, and the Dow Jones gained 9.18% YTD. <\/p>\n On Wednesday, the SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF, which track the S&P 500 and Nasdaq-100, respectively, closed higher. SPY rose 0.34% to $772.31, while QQQ advanced 0.60% to $725.61. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust, ended 0.27% higher at $524.68. <\/p>\n In premarket trading on Thursday, SPY was down 0.47%, QQQ declined 1.26%, and DIA was 0.39% lower. <\/p>\n Image via Shutterstock <\/p>\n Read Next: <\/p>\n Building Wealth Across More Than Just the Market <\/p>\n Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn’t tied to the fortunes of just one company or industry. <\/p>\n EquityMultiple <\/p>\n For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000<\/a>,<\/a> with only ~5% of opportunities passing their due diligence process. <\/p>\n Arrived <\/p>\n Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100<\/a>. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly. <\/p>\n American PowerGen <\/p>\n As artificial intelligence drives a surge in electricity demand, reliable power generation is becoming a critical part of the technology ecosystem. American PowerGen is developing natural gas-fired power plants in Texas, a fast-growing market fueled by AI data centers, manufacturing expansion, and population growth.<\/a> By advancing projects through permitting, fuel supply, and grid interconnection, the company is positioning itself to help meet rising energy needs while offering investors exposure to the infrastructure supporting the next wave of AI and industrial growth. <\/p>\n Bito <\/p>\n As AI coding tools take on more of the work traditionally done by developers, companies are facing new challenges around code quality, context and the rising cost of AI-powered development. Bito is building software designed to help AI coding agents better understand complex codebases while helping companies control AI development costs.<\/a> Founded by former PubMatic executives, Bito has raised more than $10 million from institutional and individual investors and is now raising additional capital through a Wefunder offering, giving investors an opportunity to invest in a company targeting an emerging need within the rapidly expanding AI software market. <\/p>\n FarmTogether <\/p>\n Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000<\/a> \u2014 fully managed, with no landlord headaches. <\/p>\n Fundrise <\/p>\n