The Globe and Mail reports in its Friday edition that a rude awakening over the debt-fuelled AI binge has sent investors rushing out of stocks and into government bonds, which now seem to be reclaiming their status as a safe haven. A Reuters dispatch to The Globe says that for much of the year, bonds have offered little protection as inflationary pressure pushed borrowing costs to multidecade highs, leaving investors warily looking to hedge funds and other assets as alternatives. But on Wednesday, something strange happened: Treasuries and other government bonds rallied sharply, despite a hotter-than-expected U.S. inflation report, which left chances of a U.S. rate hike from the Federal Reserve this year on the table. The bigger concern for investors now is whether massive AI spending will pay off soon enough, especially with inflation running hot, and how much longer companies will be able to continue to raise funds at current costs of capital. "The upside surprise in U.S. CPI and the subsequent rally in bonds is highly counterintuitive," said Prashant Newnaha at TD Securities. "The cleanest read through is that the slump in AI is repricing growth expectations down leading to bonds serving as a hedge for stocks."