ORLANDO, Florida: Foreign capital is flooding into Wall Street courtesy of the AI revolution. Paradoxically, however, this is intensifying the spotlight on America's chronic external deficit. How long can this massive imbalance last?
Investors around the world have poured trillions into the U.S. stock market in recent years, lured by the juicy returns promised by the artificial intelligence boom, which has spurred the biggest capex spending spree in history. This flow of overseas money into U.S. equities is now the key funding source for the U.S. current account deficit, which has widened beyond pre-pandemic levels.
