WebProNews reports:

The artificial intelligence boom is fueling an unprecedented wave of capital spending, but it’s not just innovation that’s accelerating—it’s debt. Major technology companies, often dubbed hyperscalers, are issuing bonds at a record pace to finance the massive data centers required for AI advancements. This borrowing frenzy, while enabling rapid expansion, is raising alarms among economists and investors about potential upward pressure on interest rates. As these firms tap debt markets to fund their ambitions, the sheer volume of new issuance could divert investor capital away from traditional safe havens like U.S. Treasurys, potentially driving yields higher across the board.

Torsten Slok, chief economist at Apollo Global Management, has been vocal about this dynamic. In a recent analysis, he highlighted how the surge in corporate bond sales tied to AI infrastructure might pull demand from government securities. “The AI-led borrowing frenzy could end up driving interest rates higher,” Slok noted, pointing to the competition for investor dollars. This isn’t mere speculation; data from recent months shows tech giants ramping up debt offerings to unprecedented levels, with implications that could ripple through financial markets well into 2026 and beyond.

The scale of this investment is staggering. Projections suggest that AI-related capital expenditures could exceed $500 billion in 2026 alone, according to insights from Goldman Sachs. Much of this spending targets data centers, which house the powerful servers and cooling systems essential for training and running AI models. Companies like Microsoft, Amazon, and Google are at the forefront, but even traditionally conservative players are joining the rush, borrowing heavily to avoid falling behind in the AI arms race. [Continue reading…]