"The bill for the Iran war: Buying in the "AI bull market"?

The Middle East conflict is causing structural impact on the global AI industry, pushing the already high-tech assets towards systemic risk. The impact on the energy sector has now spread to AI infrastructure. Shipping in the Strait of Hormuz is blocked, disrupting nearly one-third of global crude oil and one-fifth of natural gas exports, leading to a 40% increase in Brent crude oil prices in a single month. The prices of liquefied natural gas have simultaneously skyrocketed in European, American, and Asian markets, while the spot price of helium has doubled. Costs in key areas such as chip manufacturing and data center operations are facing reassessment. At the same time, cracks are deepening between the AI investment frenzy and the fragility of the macroeconomy. According to the "Atlantic China Welding Consumables, Inc. Monthly", by the end of 2025, almost all economic growth in the United States is being driven by AI investment, but this single growth engine is facing the risk of multiple failures at the same time. Core tech stocks such as Google, Meta, Microsoft, Amazon, Nvidia, and Oracle have collectively fallen by 8% to 27% this year, dragging down overall market performance. Investor Paul Kedrosky points out that the fundamental difference between this AI crisis and the 2008 commercial real estate risk is that "all vulnerable nodes are interwoven." Under the combined effect of energy shocks, debt accumulation, and supply chain disruptions, the AI industry is facing its first systemic stress test since becoming an economic pillar. The highly concentrated supply chain has been hit at the core by the energy shock The global AI industry's highly concentrated supply chain layout is now exposed to systemic impact due to the blockage in the Strait of Hormuz. Currently, the most advanced storage and training chips are mainly supplied by three Asian companies, and these economies largely rely on oil and liquefied natural gas imports from the Persian Gulf. Key raw materials necessary for chip manufacturing, such as helium, sulfur, and bromine, also highly depend on imports from that region. The actual closure of the Strait of Hormuz has triggered multiple transmission mechanisms: Material shortages: Helium supply shortages have begun to threaten the stable production of AI chips, with significant upward pressure on prices; Rising operating costs: Rising energy prices are putting greater operational pressure on large data centers that were already struggling to achieve profitability; Capacity expansion hindered: New data center projects face the risk of stagnation under the dual pressure of costs and supply chain disruptions. Sam Winter-Levy, a researcher at the Carnegie Endowment for International Peace, points out that the Strait of Hormuz is "crucial for almost every aspect of the global economy, and the AI supply chain cannot stand alone." At the same time, the conflict is eroding the support foundation of the AI industry from both physical security and capital supply directions. As the conflict continues in the Middle East, Amazon's data centers in the UAE and Bahrain have been attacked, and the security situation in Gulf countries as key nodes of the US AI strategy is sharply deteriorating. The Trump administration previously identified Saudi Arabia, the United Arab Emirates, Qatar, and Oman as core partners in the AI field and actively sought their financial support. However, the war has weakened the economic resilience of these oil-producing countries and threatened their ability to continue investing in US AI companies. High debt, financial risks accelerating The financial risks of the AI industry are not only from external shocks but also from internal business logic that raises concerns. Large-scale data center operators such as Microsoft, Google, Meta, and Amazon have collectively invested nearly $700 billion in the AI field in a single year. To raise funds, data center providers have leveraged significantly, including structured financing arrangements with private equity firms such as Blackstone, BlackRock, and Blue Owl Capital. In 2025, the debt issuance scale of large-scale operators reached $121 billion, four times the average level of previous years, and is expected to continue to grow significantly in the future. Brad Lipton, former Senior Advisor at the Consumer Financial Protection Bureau and current Director of Corporate Power and Financial Regulation at the Roosevelt Institute, pointed out: "The current situation evokes some of the preludes to the 2008 financial crisis. Various market entities are highly interconnected banks lend to private credit institutions, which then transmit funds to other areas, thereby amplifying systemic risk." The business models of the AI industry also face inherent deflationary pressures. The most significant cost item for data centers, advanced AI chips, rapidly depreciates due to accelerated iterations, making the underlying asset value of data centers as debt less stable. At the same time, AI services are billed based on tokens, with unit costs continually decreasing as model capabilities improve. Kedrosky describes this as a "death spiral to zero": token prices sharply decline, simultaneously weakening the overall value that data centers can create. Clear risk transmission, the crisis is not alarmist Private equity firms are facing a double squeeze: on one hand, the software companies they acquire are under pressure in valuation due to the AI impact; on the other hand, new data center investments they bet on are also in trouble. Institutions like Blackstone and Blue Owl have used tech company rental income as the premise for debt repayment, heavily investing in data center construction. However, as cash flow tightens for large-scale operators, the feasibility of this business model is being questioned. Funds from these private equity firms mainly come from pensions, endowments, and insurance institutions, thus extending the risk chain to the entire financial system. According to the "Atlantic China Welding Consumables, Inc. Monthly", just a few small problems could trigger a systemic crisis simultaneously. For example: Impact on cost: High oil and gas prices are pushing up manufacturing costs for chips and data center operations. Breakdown in industry funding chain: Large-scale data center operators already facing financial stress are unable to pay rent, and private credit institutions facing similar difficulties are heavily hit by AI-related bonds becoming "dead debts." Financial market transmission: Declining valuations of tech companies drag down public market performance; private equity firms are forced to sell assets, putting immense pressure on institutional investors and banks. Imbalance in the real economy: Due to years of excessive focus on data centers, lack of investment in other economic sectors has left the overall economy weak. Stagflation risks appear: Rising unemployment rates and simultaneously rising interest rates. "The bursting of the bubble is inevitable; this is a law of the economic system," Lipton said. "What should not happen is for the bursting bubble to destroy the entire financial system. However, the worrying thing is that the impact of AI investments is not limited to this; it could spread to the entire economy." Of course, a comprehensive crisis is not the only possible outcome. Data center spending may be able to cool down in a gradual enough manner to avoid a hard landing; revenues for Anthropic and OpenAI are both doubling every year, with supporters believing that generative AI products will eventually become profitable. However, on the current trajectory, this goal will still take several years, and the risk of slowdown or stagnation is equally real.