Stocks are the new bonds in AI — Anthropic and Meta have turned to equity investors in looking for billions of dollars.

Why it matters: After plowing billions into AI companies, bond investors have lately grown skeptical of funding open-ended asks for money.

• Stock market investors, however, are all about throwing money at hopes and dreams even when the future payout may be hard to see.

The big picture: The AI buildout requires a steady stream of investments and investors to stick with ambitious spending plans.

• To get that cash, companies are pulling every available lever: stocks, private loans and project financing, which has soared this year, as well as bonds.
• "This was always going to need to be a bit of an all-hands-on-deck situation," Amanda Lynam, chief credit strategist at Goldman Sachs, tells Axios.

Catch up quick: Three developments just yesterday illustrate that scramble:

• Meta is planning to raise up to $95 billion in stock sales — Nvidia, AMD and Broadcom might buy up to $5 billion of those shares, the company said.
• SpaceX secured a roughly $40 billion financing commitment from Apollo to lease AI chips and related equipment.
• And, of course, Anthropic filed to go public, setting the stage for possibly raising as much as $100 billion in the stock market.

Where it stands: It all seemed to rekindle investors' zest for AI. The tech-heavy Nasdaq closed up for the day. And some AI stocks popped.

• "Many of the AI jitters are melting away," said Steve Sosnick, chief strategist at Interactive Brokers.

Follow the money: That enthusiasm for all things AI in the wake of Anthropic should help sales of shares to the kinds of investors who "either believe the company is a big winner in a brave new world, or they don't," in the words of a Financial Times Lex column entitled "Why you shouldn't bother reading the Anthropic IPO filing."

Zoom in: In contrast, the open-ended promise of the AI buildout counts against these companies when it comes to the credit markets.

• Bond investors like a borrowing binge with a finish line, says Goldman's Lynam. Think of a big M&A deal where investors will know how much a company needs, when they'll need it and have a timeframe in mind for when they'll start paying down debt.
• AI isn't like that. Instead, investors are being asked to keep funding the same theme over years. Successive offerings need more incentives to attract buyers — and those sweeter deals can weigh on the value of bonds investors already own.

Zoom out: In a recent note, Lynam wrote that there had been a correction in the debt markets around AI — investors are now asking for higher returns if they're lending to companies with riskier credit profiles, as we've written.

• Higher interest rates and weak trading in two huge September bond deals— from Paramount Skydance and SoftBank — also made investors more cautious, Lynam said. "It weighed on the risk tone."

Yes, but: Stock investments in AI are not immune from investors' suddenly turning cautious. There's a lot that still has to go right for the AI trade to pay off, cautioned Sosnick of Interactive Brokers.

• "I don't want to say precarious, but if you step back, you know that it requires it requires a huge amount of, I don't know, faith," he said.

The bottom line: AI companies are testing the limits of that faith.

Don't say you weren't warned. Anthropic's IPO filing includes a long list of risks. Yes, yes, the catastrophic ones — the end of humanity and so on.

Also, perhaps scarier for investors:

• Anthropic says it has committed hundreds of billions of dollars to cloud computing and equipment leases, even as customers can reduce their usage relatively quickly.
• Some agreements require minimum payments regardless of demand, and the company warns that failing to meet certain obligations could trigger defaults elsewhere, potentially accelerating debt repayments and jeopardizing access to computing infrastructure.
• Anthropic also acknowledges that it previously underestimated its compute needs. But overestimating future demand could leave it paying for expensive, underused infrastructure.

Brazilian assets tumbled yesterday following the reelection of Brazil's left-leaning incumbent in a presidential runoff Sunday.

Why it matters: The reelection of Luiz Inácio Lula da Silva — known as Lula — underscores the economic challenges Brazil faces as the one-time union organizer heads toward his fourth nonconsecutive presidential term.

The latest: Brazil's currency plunged roughly 9% against the dollar.

• The benchmark Brazilian stock market index, the Ibovespa, dove about 14%.
• Prices of 10-year, local-currency Brazilian government bonds dove, pushing yields to about 15%.

Fun fact: Anyone following the prediction markets on this one would have been led astray, as Kalshi bettors put Lula's odds of prevailing at roughly 20% well into Sunday. (The old truth machine must have thrown a rod on this one.)

The other side: Lula defeated right-wing candidate Flávio Bolsonaro, a son of the former president Jair Bolsonaro and a senator, whose victory in the first round of the presidential contest ignited a rally in Brazilian assets earlier this month.

• The younger Bolsonaro's promises to clamp down on government spending had been well received by international financial markets.
• Bolsonaro has so far refused to concede his defeat, taking a page out of the playbook of his father, who last year was convicted of attempting a coup to remain in power, after he was defeated by Lula in 2022.

What they're saying: "Instead of the expectation of fiscal consolidation under Bolsonaro, traders will likely take the view that Brazil will 'muddle through' for the next four years, and that, like France, it will be market discipline, rather than pre-set policy direction, that will ensure that Brazil does not indefinitely veer off course toward a sovereign default," Macquarie currency and bond analysts wrote.