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Big Tech’s AI Spending Is Shaking the U.S. Bond Market
In 2025, America’s biggest tech firms — Meta, Alphabet, and Oracle — are taking on record levels of debt to fuel the AI race.
Meta issued $57 billion, Alphabet $25 billion, and Oracle $18 billion in bonds this year alone, according to the Financial Times.
This surge in corporate borrowing has pushed bond yields higher, as investors demand greater returns to offset growing financial risks.
AI’s promise is massive, but so are its costs. Building advanced data centers and GPU farms requires billions in upfront spending. Meanwhile, AI profits could take years to materialize.
Three factors are driving caution:
High capital costs for infrastructure.
Uncertain returns from new AI models.
Persistent high interest rates from the U.S. Federal Reserve.
As a result, Big Tech’s once “safe” bonds now trade with wider spreads — a sign that Wall Street views them as riskier than before.
For more than a decade, tech companies were famous for their cash piles and minimal borrowing. Now, AI ambitions have flipped that model. These firms are leveraging debt like traditional manufacturers to fund innovation.
While this strategy can accelerate growth, it also exposes them to rising interest costs and potential credit downgrades.
The bond market often mirrors the broader economy.
When yields rise, borrowing costs increase across industries, slowing expansion and hiring.
Still, some see opportunity — higher yields attract investors looking for better returns, keeping liquidity strong.
But if AI spending doesn’t deliver quick profits, the financial strain could spill over into banks, funds, and retail portfolios.
Big Tech’s AI investments are reshaping U.S. finance.
The same innovation driving technological progress is now rewriting Wall Street’s risk calculus.
In 2025, the question isn’t just how powerful AI will become, it’s how much debt the future of AI is worth.
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