Hyperscaler Debt Bombshell: Interest Rates Soar as Tech Giants' Borrowing Spree Continues
Long-term interest rates have reached their highest levels in two decades, and experts are pointing to hyperscaler debt issuance as one of the main culprits. Apollo Global's chief economist Torsten Slok identified 'hyperscaler issuance' as a key driver behind 30-year Treasury yields reaching a 20-year high, alongside inflation and fiscal deficits.
Amazon.com Inc. (NASDAQ:AMZN) and Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) have led the borrowing spree over the past 12 months, with Meta Platforms Inc. (NASDAQ:META) and Oracle Corp. (NYSE:ORCL) also ranking among the biggest issuers.
The term 'AI Debt Tsunami' was coined by Palumbo Wealth Management to describe the massive debt issuance in the AI sector. Morgan Stanley figures show high-grade AI debt supply reached $270 billion by early July, more than double all of 2025's total. Hyperscaler capital expenditures are projected at $650 billion to $800 billion this year and could exceed $1 trillion in 2027.
Goldman Sachs sounded a similar alarm on July 20, noting that Microsoft, Amazon, Alphabet, Meta, Oracle, Nvidia Corp. (NASDAQ:NVDA) and SpaceX (NASDAQ:SPCX) collectively issued $244 billion in bonds this year, 14 times 2024 levels and more than double last year's total.