Fed Chair Kevin Warsh Warns AI Investors Over Interest Rates

The Federal Reserve just held its benchmark interest rate steady at three point seven five percent on Wednesday. Fed Chair Kevin Warsh warned investors that high interest rates are not going to miss the artificial intelligence boom. Tech boosters often claim that massive expected returns make financing costs irrelevant to them. Warsh pushed back on that idea completely. He said that interest rates get into the cracks of the economy and affect almost everything. Higher rates will not stop all tech spending entirely. Instead, they will force investors to be much more selective about which projects get funding. Credit markets are already showing this shift as spreads widen for certain assets. Borrowers with shaky paths to cash flow will face a much harder time securing cash. Meanwhile, Alphabet saw its stock price drop more than eleven percent after hours on Wednesday. That single sell-off wiped out over two hundred eighty billion dollars in market value despite Google Cloud doubling its revenue to thirty point seven billion dollars.