On November 13, 2026, the Federal Reserve Board published its November 2026 Financial Stability Report. The report says that asset valuation pressures remain elevated, that equity valuations are partly driven by market enthusiasm for what it calls “super intelligence” (SI), and that debt issued to finance advanced computing infrastructure has grown rapidly. For universities and research funders, it is context on how the financial system’s regulators describe the AI buildout, not guidance on research funding.
What the report says about valuations
The report generally reflects information available as of October 28, 2026. In its overview it states that asset valuation pressures “continued to be elevated” and that measures of equity valuations “have remained high, partly driven by market enthusiasm for super intelligence (SI).” It adds that the ratio of equity prices to earnings for S&P 500 companies stayed well above its historical median. Section 1 says broad equity valuation metrics were partly driven by that enthusiasm, “though moderated by concerns over firms’ capital expenditures and debt issuance plans.”
Data center and advanced computing debt
A boxed analysis, “Leverage in the Data Center Buildout,” reports that debt issuance to finance advanced computing infrastructure has grown rapidly over the past year, and that the debt is shifting from mostly corporate bonds to a mix of public and private debt, structured credit and project finance. Figures it gives:
- Advanced computing-related debt issuance rose to more than $680 billion by October 2026, about a fivefold increase from $130 billion in all of 2023.
- Such borrowing rose from less than 6 percent of nonfinancial investment-grade corporate debt issuance in 2023 to about 31 percent in 2026.
- Outstanding public debt related to advanced computing is estimated at more than $1.1 trillion as of October 2026; the report notes that private credit transactions make the full magnitude harder to measure.
- Not-yet-commenced leases have undiscounted values above $1 trillion, and take-or-pay contracts and residual value guarantees above $2 trillion.
- The largest U.S. bank holding companies have close to $1 trillion of exposure to large technology firms, data center developers, advanced computing-related special purpose entities and private credit vehicles, and utility companies; the report says these exposures are evaluated in the annual supervisory stress test.
The report describes a “circular financing” dynamic in which hyperscalers and GPU makers supplement debt financings with equity investments in smaller firms. It says the complex links among data center firms, public credit markets, private lenders and special purpose vehicles “create vulnerabilities that necessitate close monitoring.”
Survey of market contacts
Box 5.1 summarizes a survey run by Federal Reserve Bank of New York staff, with responses from 23 contacts at broker-dealers, banks, investment funds and advisory firms in September and October. The report notes the box does not represent the views of the Board or the New York Fed. AI was the top-cited risk. Respondents named three areas of concern: elevated equity valuations and the possibility of a market correction if earnings disappoint; cybersecurity risk, from sophisticated attackers or from damage caused by frontier AI models themselves; and complex forms of AI-related financing. Mentions of AI, higher long-term rates and cyberattacks rose the most relative to the spring survey.
In Section 5, the report says private fixed investment tied to new computing technologies has been a significant driver of U.S. economic growth this year, and that an unexpected downturn in corporate earnings could prompt lower asset valuations, tighter credit conditions and reduced capital expenditure.
What it means for research offices
The report is a financial-stability assessment; it makes no statement about research funding, universities or grants. Research offices that depend on technology-sector gifts, sponsored agreements or endowment returns may find it useful as background on how regulators characterize AI-sector exposure, alongside their own institutional risk processes. See also CASRAI’s grants management hub for funding-side practice.
Sources
- Board of Governors of the Federal Reserve System, Financial Stability Report, November 2026 (PDF), released November 13, 2026.
- Federal Reserve, Financial Stability Report publication page.
