The AI wallet is tightening. A day after Alphabet’s earnings report, its stock plunged 13%—the worst single-day drop in company history. The Nasdaq 100 fell 6.7% in October, wiping out $2.7 trillion in market value. Even bonds tied to SpaceX and Meta are trading at steep discounts. Meta has even planned to issue stock, aiming to raise up to $97.5 billion. But the first to run out of cash are the companies that specialize in renting out computing power for AI. These firms are called neoclouds: they buy NVIDIA GPUs, build data centers, and lease computing capacity to large tech firms and AI startups. They’ve borrowed heavily—and when interest rates shift, they feel the pain first. CoreWeave issued a bond earlier this year with a coupon rate of 9.75%. Now, on the secondary market, buyers demand yields of over 15% to take it on. In other words, if it wants to borrow new money, it’ll have to pay interest rates of 15% or higher. The door to issuing high-yield debt for these companies is essentially shut. Nebius considered its first bond offering but ultimately abandoned it. Its CEO publicly stated last week that some funding channels are “temporarily closed,” and the company is now relying on customer prepayments for cash. The market doesn’t doubt AI—it doubts these companies can generate enough revenue to cover their interest payments. The first to have their necks squeezed in this AI wave are the landlords who serve AI.