AI funding fears are overstated, says Goldman Sachs' Sung Cho

Core Insights - Coreweave shares have dropped over 20% this week, reflecting growing anxiety about the AI market bubble [1] - The current market sentiment is heavily influenced by concerns over debt, depreciation, and doubts about future growth [2] Funding Landscape - The total funding required over the next couple of years is estimated to be between $700 billion and $1 trillion [3] - Approximately 90% of this funding is expected to come from operating cash flows, with only 10% from debt, primarily issued by companies like Meta, which has a higher credit rating than the US government [4] Market Dynamics - Coreweave and Oracle represent only 2-3% of the overall debt market, indicating that the broader funding environment remains stable despite specific concerns [5] - There are supply chain issues affecting Coreweave and Oracle, but these companies are not facing a demand problem [6] Competitive Landscape - The AI ecosystem is currently dominated by OpenAI and Google, with Google’s Gemini model gaining significant traction and market cap, surpassing OpenAI in investor perception [10][11] - The volatility in AI model leadership is expected to continue, with new models set to enter the market in Q1 2026, suggesting that OpenAI's dominance may not be permanently diminished [11]