"AI represents what Diameter Capital sees as a long-running, disruptive cycle - but buying the most obvious winners isn't the only way to play it, he said on the "Goldman Sachs Exchanges" podcast published on Friday. Diameter Capital, which manages approximately $25 billion in assets, has focused on where AI demand could create less obvious bottlenecks - and where those bottlenecks show up in credit markets."
"Goodwin said the bet was rooted in the idea that as companies move from training AI models to actually using them, demand shifts away from chips alone and toward the networks that carry data. "It had to leave the data center. How would it leave? It would leave on the commercial fiber, the pipes," he said. The telco went on to sign more than $10 billion in contracts with hyperscale cloud providers, and the debt has rebounded to face value, Goodwin said."
AI demand is shifting from model training in data centers toward real-time usage that relies on telecommunications and satellite connectivity. Diameter Capital targeted unsecured debt in a midsize telecom after anticipating traffic would leave data centers via commercial fiber, leading to contracts with hyperscalers and a recovery of the debt to face value. The firm also invested in a satellite company tied to wireless spectrum; sale of spectrum assets restored debt value. Diameter highlights credit-market opportunities in infrastructure bottlenecks while warning that concentrated risks exist across AI credit, especially in chip financing.
Read at Business Insider
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