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Title: Deutsche Bank Explores Hedges For Data Centre Exposure as AI Lending
Booms

Link: https://slashdot.org/story/25/11/05/182230/de...

Financial Times: Deutsche Bank is exploring ways to hedge its exposure to
data centres after extending billions of dollars in debt to the sector to
keep up with demand for artificial intelligence and cloud computing.
Executives inside the bank have discussed ways to manage its exposure to the
booming industry as so-called hyperscalers pour hundreds of billions of
dollars into building infrastructure for their AI needs that is increasingly
funded by debt. The German lender is looking at options including shorting a
basket of AI-related stocks that would help mitigate downside risk by betting
against companies in the sector. It is also considering buying default
protection on some of the debt using derivatives through a transaction known
as synthetic risk transfer (SRT). Deutsche's investment banking business has
"bet big" on data centre financing, according to one senior executive.
However, the scale of expenditure on AI infrastructure has prompted concerns
that a bubble is forming with some likening the enthusiasm to that which
preceded the dotcom crash. Sceptics have pointed out that billions of dollars
have been deployed in an untested industry with assets that quickly
depreciate in value due to the rapid change in technology.

Read more of this story at Slashdot.

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