Capital Allocation Policies in a Time of Artificial Intelligence and Investor Questions

# Growth-Tech Treasurers

# Cross-Network

Across the corporate spectrum, companies need to invest heavily in AI. Technology companies are making unprecedented capital expenditures on chips, data centers, R&D, and power supplies. But even non-tech companies are making incremental investments in AI. At the same time, investors seem concerned about when these investments will pay off. And in the case of SaaS companies, equity valuations have dropped, leveraged SaaS loans have become more expensive and investor interest on both the equity and debt side has declined. This means that just as their Capex demands increase, for some companies their capital issuance capacity has decreased and their WACC has increased. Even non-AI related M&A can be indirectly affected by these dynamics.

These factors play havoc with a capital allocation policy. Internal business lines who are are competing for capital investments might fear being crowded out by the size of AI investments. Investors and lenders want to understand how much companies are allocating for AI infrastructure and when they think they will start realizing returns. Especially for SaaS companies, investors want to understand how the AI surge will change the overall capital allocation for the companies and whether this is a temporary or permanent change.

Please join us for a member panel discussion to explore this issue and how treasurers can best navigate the internal and external stakeholders.