Moelis & Co.'s Eric Cantor Talks AI Supercycle

Summary

Bloomberg Talks: Moelis & Co.'s Eric Cantor Talks AI Supercycle

Date: August 4, 2026
Host: Bloomberg Team
Guest: Eric Cantor, Vice Chair of Moelis & Co. and former House Majority Leader

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Episode Overview

This episode explores the ongoing "supercycle" in investment driven by digital transformation—especially around AI infrastructure, data centers, and related technology. Eric Cantor shares his insights on capital competition, financial market dynamics, the health of corporate versus government balance sheets, and the future of M&A. Key policy debates, the state of private equity, and the interplay between private sector innovation and government fiscal discipline are deeply discussed.

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Key Discussion Points & Insights

1. Investment Supercycle & Digital Infrastructure

• Eric Cantor describes the current period as possibly the largest investment cycle since the late 1800s ([01:07]):

  “Some people say that we are in the biggest investment cycle since the late 1800s… amazing to see the pivot into this digital infrastructure surge around data centers and really the standing up of new industries.”

• Every conversation at Moelis is “somehow downstream from this incredible cycle we’re seeing.”

Implications for Markets & M&A

• The market remains “constructive for the M&A deal environment” ([01:24]).
• Despite a “K-shaped” consumer market, the overall market resiliency is “pretty stunning.”
• Washington’s posture is pro-growth due to global uncertainty.

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2. Capital Competition: Corporate vs. Government

• Bloomberg Interviewer flags concerns about the ‘race to raise money’ amid high debt forecasts ([00:36]):

  “What does it mean for this competition for capital, this race to raise money?”

• Cantor notes a "supercycle for the mega caps"—especially among hyperscalers and top-level management laser-focused on technological positioning ([02:22]).
• Availability of capital for good companies is robust; themes in private equity are evolving to give limited partners more liquidity, often via creative structures ([02:57]).

Notable Quote ([03:29]):

“It is pretty remarkable the resiliency of what we’re seeing.” — Eric Cantor

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3. Private Equity Trends & Deal Flow

• Deal activity is expected to remain strong in the second half, fueled by healthy markets and an impressive earnings season.
• Market “mindset” is upward, not derailed by looming midterms ([03:40]).

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4. Corporate vs. Treasury Yields & the ‘Race for Capital’

• Spreads between 10-year corporate investment grade bonds and Treasuries have narrowed from 150bps to under 100bps ([04:13]).

  “Either corporates are getting a lot more healthy or the government’s getting a little less healthy.” — Eric Cantor ([04:20])

• The preferred financing method is debt issuance in private markets.
• Rising global populism forces governments to reassess funding strategies.

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5. Fiscal Discipline & Washington's Limits

• Host raises question of a potential “Liz Truss moment” in the US ([05:08])
• Cantor expresses faith in America’s ability to innovate and adapt ([05:15]):

  “This country… relies on the growth and the innovation in the private sector… The private sector puts pressure on Washington.”

• Yet, persistent deficits (circa 6%) are a major worry, even amid strong economic growth ([05:45]).

Notable Quote

“Washington wakes up and it will do its job when it has to because the political cost of inaction will become more than acting. And that's, I think, when it does work, and it will in this country.” — Eric Cantor ([06:29])

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6. Federal Reserve Policy and Market Impact

• Cantor finds fault with demands for the Fed to emulate either Powell or Greenspan, noting that “there is a space in the middle” ([05:55]).
• He welcomes potential moves “back to basics” for the Fed, emphasizing the eventual necessity for Washington to act as bond market pressures mount ([06:10]).

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7. Inflation, Rates & Real Economy Concerns

• Fed tightening is debated—the real impact is shaped by gas prices, energy markets, and consumer sentiment ([07:11]).
• Cantor connects market phenomena to global supply issues—particularly energy and the Middle East conflict ([07:50]).

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Notable Quotes & Moments

• “Some people say that we are in the biggest investment cycle since the late 1800s.”
  Eric Cantor ([01:07])
• “There’s no question, there’s a super cycle for the mega caps...the hyperscalers…at the board level, at the senior management level who come into their jobs every day and say, hey, how are we going to position, given this technological revolution?”
  Eric Cantor ([02:22])
• “Either corporates are getting a lot more healthy or the government’s getting a little less healthy.”
  Eric Cantor ([04:20])
• “This country… relies on the growth and the innovation in the private sector. And we’ve always found a way to rise to the occasion.”
  Eric Cantor ([05:26])
• “Washington wakes up and it will do its job when it has to because the political cost of inaction will become more than acting.”
  Eric Cantor ([06:29])

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Important Timestamps

• 01:07: Historic investment cycle and digital infrastructure
• 02:22: Mega cap supercycle, PE creative solutions
• 03:29: Resiliency of markets and deal flow
• 04:13: Corporate vs. government competition for capital; yield spread
• 05:15: US “Liz Truss moment”? Faith in American innovation
• 05:45: Impact of deficits, Federal Reserve policy discussion
• 07:11: Fed rate hikes, inflation, energy market impacts

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Tone and Style Notes

• The conversation is optimistic about technological innovation and American adaptability, but grounded by realistic concerns over debt, fiscal policy, and political constraint.
• Cantor balances macroeconomic analysis with the practical lens of deal-making and advisory work in finance.

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This episode provides a nuanced look at the intersection of market dynamics, technology supercycles, and fiscal discipline—offering actionable insights for policymakers, investors, and business leaders alike.

Transcript

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[Bloomberg Host]

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[Bloomberg Interviewer]

News we got some new forecasts from JP Morgan in the last 24 hours and they're looking for yields to go even higher. They're looking for 540 on 30s for 85 on tens and Barclays say there's room for long term rates to move even higher. What does it mean for this competition for capital, this race to raise money? Joining US Now, Madison Co. Vice Chair and former House Majority leader Eric Cantor. Eric, good morning. It's good to see you.

[Eric Cantor]

Great to be here.

[Bloomberg Interviewer]

But a major competition for capital. Haven't seen anything like this for a long, long time. What do you see in your business?

[Eric Cantor]

Look, some people say that we are in the biggest investment cycle since the late 1800s. I mean, it is amazing to see sort of the pivot into this incredible digital infrastructure surge around data centers and really the standing up of new industries almost. I mean, this is, I think, where every conversation that we're having at most is somehow downstream from this incredible cycle we're seeing. And you know, listen, the markets are still constructive for the M and A Deal environment. As you said just now, the resiliency is pretty stunning on the consumer end. Although people will say it's a case, a case shaped consumer market. But for now, again, I think you've got Washington poised such that it wants to see this growth continue given everything else that's going on in the world.

[Bloomberg Interviewer]

We were speaking to Cisco, to G2 Patel in the last week or so and I've been somewhat concerned about where the technology might be heading for several different reasons. And he asked me if I was still skeptical or concerned. And I said I was becoming more concerned about where financial markets were going, the amount of debt that's being issued, the amount of debt that will be issued over the next year and perhaps, you know, even beyond. Have we entered the more creative stage on Wall street that might be of concern?

[Eric Cantor]

Look, there's no question, number one, there's a super cycle for the mega caps. I mean, there's no question. And we've seen this with the hyperscalers. We're seeing this with everyone, you know, at the board level, at the senior management level who come into their jobs every day and say, hey, how are we going to position, given this technological revolution that we're facing and given where the constructive nature of the regulatory environment, I think that there is a willingness and a desire to want to transact, you know, on the private equity side. You know, there's, there's a lot of dialogue that continues and I know that we at Molis are continuing in all kinds of discussions with our sponsor clients as well. And there's just availability of capital for good companies. You know, as, as you, as we know there's been a thematic in the sponsor world about trying to return more capital to LPs and if there isn't a traditional exit strategy, there are all kinds of creative solutions to help these investors access capital so they can return to LPs and start a new fund. So it is pretty remarkable the resiliency of what we're seeing.

[Bloomberg Host]

How active do you expect deals to be in the second half? I mean, is it going to be accelerating actually even from the first half because of the smaller corporate action from LPs from these exits that are getting creative?

[Eric Cantor]

Well, I just think in general the markets are still looking fairly healthy. The, as you noted, the earnings season has been pretty stunning on the part of those that have reported. And I think that is indicative of where the mindset is that we are continuing an upward trend just in the macro level of the market. So you know, you have midterms looming out there and people always like to say will that or won't that impact transaction activity? We'll have to see.

[Bloomberg Host]

Do you think that good corporates are competing for capital with the U.S. government?

[Eric Cantor]

Look, I don't think there's any question if you look at the spreads between, you know, the, the, the 10 year corporate investment grade instrument versus the 10 year, I think if historically it's 150 basis point spread, I think we're under 100 now. Which could tell you one or two things. Either corporates are getting a lot more healthy or the government's getting a little less healthy. So I do think there is a race for capital. And as we said before, we're in the super cycle of investment. The preferred choice of financing currently has been this issuance of debt on the, on the private side. And, and yet we have this increasing populism around the world that is forcing governments to have to take a look at how much and how they're going to figure out to finance the needs of their government.

[Bloomberg Interviewer]

Their population is the increasing and growing majority of that. All in yield is the Treasury. And I think that tells you about where the concern might be more recently.

[Bloomberg Host]

Well, and that's really the ultimate question. Are we getting to that Liz Truss moment in the United States? Do you see us as getting closer to it?

[Eric Cantor]

I don't. I mean, I have a lot of faith in America. And you know, look at Eric.

[Bloomberg Interviewer]

I got tons of faith in America. I love this country. Do I have faith in your Washington? I have far less faith in your Washington.

[Eric Cantor]

Look, I've always said that this country, more so than anywhere else in the world, relies on the growth and the innovation in the private sector. And we've always found a way to try and rise to the occasion. And the private sector puts the pressure on Washington.

[Bloomberg Interviewer]

There's the issue. And private sector done its job.

[Eric Cantor]

The private sector.

[Bloomberg Interviewer]

But economy, this economy, the US Economy has grown tons. When you just want to finish the thought, it's important. It's done fantastically well. And we're still running deficits around 6%, 100%.

[Eric Cantor]

And that's why I think that all this discussion around Kevin was and you know, I happen to be a big fan of his and I happen to think he's been unequivocal on his desire to beat inflation. He said where we are is not success. And the markets and the, let's just say the observers are throwing a tantrum that he's not being more like Jay Powell, but he's not being like Alan Greenspan, like, which way are we going to go? And I think there is a space in the middle for him to go. And he said he doesn't like the, the mission creep of the Federal Reserve. He wants to get back to basics. He wants to make sure that there is some discipline about the regulatory construct of the Federal Reserve. But all that having been said, I'll tell you that the net interest costs, and we've talked about this before, the interest cost of the federal government is at a point now where in history, markets, bond markets and others begin to pay attention. And Washington wakes up and it will do its job when it has to because the political cost of inaction will become more than acting. And that's, I think, when it does work, and it will in this country,

[Bloomberg Host]

just based on what you're seeing in the companies that you do business with, do you think it's appropriate for the Fed to hike rates to try to restrain some of what we're seeing with respect to inflation?

[Eric Cantor]

No, again, I just think, you know, from, you know, a firm like ours, at most, you know, we are looking at where management teams, boards, take a view of their own company and they are receivers of what the policymakers are doing in Washington. And so I think that the Federal Reserve and others are looking at it from a much more macro level. And that is, where are we going to be long term? What does this mean? And when you're in an election year, what does this mean? Not just for the businesses that we advise, but it's really about the people who are waking up this morning and looking at those gas prices. And what does that mean and how does that figure into inflation? You know, we got a real shortage of refined product. You know, there's a lot of controversy about the earnings of the super majors in the oil and gas sector. But again, it's really about the market. It is. People have been saying for months now that this conflict in the Middle east is going to result in a shortage of supply. I mean, we know that that was coming. I think we're here now.

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