GoKawiilAI’s insatiable need for debt has so far been matched by investors’ appetite for it, but they may turn nauseous on the belly-busting volumes coming from tech giants.
The latest quarterly reports from AI hyperscalers show that their massive spending plans remain on track, with Amazon even raising its capital expenditure guidance. That means even more bond issuance is on the way after an already staggering debt orgy.
The numbers paint a picture of a borrowing binge that’s bigger—and murkier—than it looks on paper. S&P Global counts $225 billion in bonds issued by hyperscalers and related entities like Nvidia so far this year, putting them on pace for a record haul in 2026—but that’s just the visible debt. Other analyses suggest so-called hidden debt at the five U.S. tech giants has ballooned, meaning the AI boom’s true price tag is only partly reflected in the bond markets that everyone’s watching.
Here is what is visible—and just barely visible—in the hyperscalers’ debt loads.
‘Market participants are growing leery’
S&P Global calculated that hyperscalers and “related entities” like Nvidia have issued $225 billion in bonds so far in 2026, representing a 973.7% jump through midyear. They are on pace to issue $400 billion for the full year.
But markets are showing signs of fatigue, after absorbing this flood of debt in such a short time, S&P warned, pointing out that hyperscalers are now paying a higher premium compared with yields on risk-free bonds.
“Market participants are growing leery of quickly rising leverage from issuers previously characterized by strong and reliable cash flow,” the report said.
At the same time, the federal government also needs bond investors to scoop up all the debt coming out of the Treasury Department, with the budget deficit this fiscal year expected to hit nearly $2 trillion.
And unlike earlier periods of heavy debt, the Federal Reserve is no longer a big buyer of Treasuries, placing a heavy burden on private-sector investors.
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