An AI company’s bonds now pay over 15%. In 2007, credit cracked three months before stocks peaked.

Lenders decide every day whether they will get their money back. When they start to worry, they charge more. This week they charged one AI company more than 15% a year to borrow, about three times what the US government pays.

One company's bonds are not a crash signal. But in 2007 the first cracks also showed up in one corner of the bond market, three months before stocks peaked. Here is what happened then, what is different now, and the dates to watch.

AI needs data centres, chips and power, and the bills are enormous. The cash the big tech companies earn no longer covers all of it, so more and more of the build-out is paid for with debt. Here is the chain, from the spending to the people who carry the risk.

It is not only CoreWeave. The Financial Times reported this week that bonds which paid for big data-centre projects were trading below face value. When lenders get nervous, a company that relies on borrowing has three choices: pay more, build less, or sell shares. Stockholders feel all three.

2007. The borrowing boom was in mortgages. Banks bundled home loans into bonds and sold them around the world. The first cracks showed up in June, inside two Bear Stearns hedge funds that had borrowed heavily to buy those bonds.

Stocks barely noticed. The S&P 500 wobbled over the summer, then closed at a record on October 9. Lenders had been asking for more for months by then: the extra yield on medium-grade company bonds over Treasuries rose from 1.59 points in mid-July to 2.13 by mid-September. Seventeen months after the record, the S&P 500 was down 57%.

2000. The borrowing boom was in telecom. Companies raced to lay fiber-optic cable for an internet they were sure would explode, and US telecom firms borrowed more than $320 billion between 1999 and 2001.

The internet did change everything. But by April 2001, less than 3% of the long-distance fiber was in use. The loans could not be paid, telecom defaults soared, and the Nasdaq fell 78% from its March 2000 record to its October 2002 low.

In June 2007 the trouble also looked like a special case: two hedge funds at one bank. Most of the time, one borrower's trouble stays one borrower's trouble. Sometimes it spreads, from the weakest borrower to the next and from bonds to stocks. From the inside, the first weeks of both look the same.

So, is the market Risk ON or Risk OFF right now? That is the one question most investors only answer in hindsight, after the damage is done.