Wall Street Sounds Alarm on Big Tech’s AI Debt-Fueled Expansion
Bonds issued by hyperscalers—Alphabet, Meta, Microsoft, and Oracle—have slumped as yields spike to 0.78 percentage points over Treasuries, the widest spread since April's tariff-induced volatility. This marks a stark reversal from September's 0.5-point spread, signaling growing skepticism about tech giants leveraging debt markets to fund their $5 trillion AI infrastructure push.
Fixed income managers now question the sustainability of what JPMorgan calls "the largest capital deployment in tech history," with concerns mounting over energy demands, overcapacity risks, and whether AI investments can generate promised returns. The sector's reliance on public market financing has become unavoidable, with Wellington Management's Brij Khurana noting: "The market finally realizes this AI boom isn't self-funded—it's a debt-fueled arms race."
