Big Tech's $320 Billion Debt Surge Exerts Pressure on Treasury Yields

The Big Tech sector is on track to issue a record-breaking $320 billion in debt this year, eclipsing total Treasury bond issuance by nearly 70%. This surge is largely driven by the AI debt boom, which has seen companies like Amazon.com, Alphabet Inc., Meta Platforms Inc., and Oracle Corp. issue over $194 billion in bonds through early July.

The AI debt boom is causing Treasury yields to rise, with the 10-year Treasury yield reaching a high of 4.80% last week, its highest level since January 2025. The 30-year yield has also climbed to 5.31%, its highest since June 2007. In response, Treasury Secretary Scott Bessent has increased the size of the department's long-end liquidity-support buybacks to at least $4 billion per operation starting September 9.

Not everyone sees this as a problem, however. Jai Kedia, a research fellow at the Cato Institute, believes that the AI buildout is 'healthy competition to government bonds from increasingly valuable corporate bonds.' He points out that federal debt has surpassed $40 trillion in August and notes that tariffs and other policies are fueling inflation.