The AI buildout is turning into a profit engine for the big banks, as the tech giants tap Wall Street to finance enormous capital spending and AI-fueled stock gains lift trading revenues.

Why it matters: Banks are cashing in on the AI boom across debt underwriting, advisory and trading — while largely distancing themselves from concerns that the rally could be forming a bubble.

State of play: Morgan Stanley's debt underwriting revenue jumped to $785 million in the fourth quarter, up 93% from a year ago — the biggest increase on Wall Street.

• Tech companies are borrowing aggressively to fund AI infrastructure, especially data centers, with spending hitting over $700 billion in 2025.
• Morgan Stanley arranged tens of billions of dollars in AI-related debt in the fourth quarter alone, including more than $27 billion tied to Meta's Hyperion data center in Louisiana, as part of Morgan Stanley CEO Ted Pick's push deeper into debt capital markets.
• The broader AI boom in the stock market is also helping financial institutions: Trading revenue at Goldman Sachs hit a record high, and rose 10% at Bank of America from the prior year.
• AI adoption is another potential profit boom for the major banks: JPMorgan Chase pinned some of its expense increases for the quarter on its tech investments.

What they're saying: Underwriting tech debt is an opportunity, "but also comes with risks," Mac Sykes, portfolio manager at Gabelli Funds, tells Axios.

• Still, Morgan Stanley is "well positioned to benefit from" the "AI infrastructure productivity wave," Sykes notes, adding that the firm's risk appetite is disciplined and well diversified when it comes to its loan books.

Between the lines: Remember, the circular funding problem means if these companies are taking out debt to pay each other, that helps each other's earnings —as well as their lenders.

• For now, more debt = more spending = more earnings, and future bubble questions regarding this are not acceptable in rooms with Wall Street strategists!

Yes, but: It's not just AI fueling gains for the banks.

• Financial conditions are loose, and the Trump administration's deregulation stance has allowed for an increase in capital markets activity.
• Investors like Sykes expect more to come amid what could be a $3 trillion IPO boom in 2026, with giants like SpaceX and OpenAI potentially going public.

What we're watching: Whether AI-driven capex remains strong enough to sustain debt issuance and stock market gains in 2026.

• That could have implications far beyond the tech sector.

Amazon is the inaugural buyer of copper cathode that mining giant Rio Tinto is producing with a process it calls much more climate-friendly than traditional methods.

Why it matters: Copper prices are up 39% from an August low. That comes amid a boom in demand from data centers, which need lots of it, and a hit to supply that has fueled concerns about a looming shortfall in the decades ahead, a recent S&P Global report found.

Driving the news: Amazon has a two-year deal with Rio Tinto for its new Nuton copper product, while Amazon is providing cloud-based data and analytics support to help produce it. Terms weren't disclosed.

• "It's a phenomenal meeting of minds," Rio Tinto copper chief executive Katie Jackson told Axios.
• She touted Nuton's ability to bolster the domestic supply chain of copper — which the Trump administration classifies as a "critical mineral" — without the many years needed to permit new mines.

State of play: Rio Tinto, late last year, began using the process to extract copper from U.S. ores that are traditionally hard to process and often become waste.

• It involves using microorganisms — or "bioleaching" — to remove copper from sulphide ores.
• Rio Tinto is initially working at a once-dormant Gunnison Copper Corp. site in Arizona and hopes to deploy the tech elsewhere in North and South America.

The intrigue: The process "removes the need for traditional concentrators, smelters and refineries, significantly shortening the mine-to-market supply chain," yesterday's announcement states.

• It also uses far less water — about 55% as much per unit of copper as the global industry average.

Yes, but: Nuton is initially a tiny slice of Rio Tinto's output.

• The company expects to produce about 14,000 tons of Nuton over four years from Gunnison's Johnson Camp mine, Jackson said.
• Rio Tinto's global copper output was nearly 900,000 tons last year.

The bottom line: While the initial volumes are small, Jackson calls it a potentially transformative moment.

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Oil prices slid yesterday, ending a five-day rally, as President Trump stepped back from an armed confrontation with Iran, a major producer of crude.

The big picture: Oil traders, who, between Iran and Venezuela, have been gripped by the geopolitical risks to the market since the start of the year, can exhale, for the moment at least, and again focus on assessing supply and demand.

Yes, but: When it comes to Iran, "much of the public messaging from Washington appears designed to maximize uncertainty — and potentially throw off Iran," Axios' Barak Ravid writes.

The bottom line: Oil prices are trending in the direction the administration wanted amid a broader push to focus on affordability.