AI's order book runs to 2030, but the debt behind it rests on lab revenue nobody has seen

Eindhoven. On Wednesday October 14, ASML said its production plans will fall short of demand in 2027 and 2028, even after the expansion it announced in July. Customers already want to place orders for 2029 and sometimes 2030, and ASML will raise prices from 2027. Chipmakers are committing money to factories years before the chips those factories make exist. ASML is about a sixth of Pat Dorsey's portfolio. The shortage lets ASML earn more on every machine, though analysts already ask what happens to orders after 2029.

Dallas. Applied Digital rents data center capacity to AI firms. Its quarterly revenue quadrupled, but its loss grew far larger than a year earlier. Costs rose faster than sales because of new sites, stock pay for staff and interest on the debt funding the buildout. The company carries more debt than cash and borrows against long-term contracts with cloud giants instead of against profit. On October 9, its power unit Base Electron filed confidentially for an IPO, a way to raise money that adds no debt to its parent.

Tokyo. SoftBank sold a record amount of junk bonds in September and agreed to pay up to 9.75% so it could keep its OpenAI stake instead of selling assets. Alphabet paid far less in August on a bond of similar length, because lenders charge more when the borrower's payoff depends on someone else's AI business. SoftBank's shares are down more than a third since June. OpenAI has said it will not go public this year, so SoftBank cannot turn that stake into cash soon.

The labs. OpenAI told investors its annualized revenue was about $20 billion below the figure reported in late September, because it stopped counting sales made through cloud partners. On October 8, the day the gap became public, chip stocks fell. Anthropic shows institutional investors its first quarterly financials on October 14, and it is unclear whether those numbers include partner sales. Investors are only now seeing the revenue meant to repay all this borrowing, and the two biggest labs do not count it the same way.

Capital. On October 12, Broadcom CEO Hock Tan said access to capital could be a bigger limit on AI than chips, memory or power, and Intel's chief agreed. Treasury yields sit near 24-year highs, so every borrower in the middle of the chain pays more to keep building. Micron makes up nearly a third of Leopold Aschenbrenner's portfolio, and he also holds a small Applied Digital stake. Both positions depend on debt-funded spending continuing. Micron's customers have raised their locked-in orders, so demand is holding for now, and the money behind it is the weaker link.