Rising US Bond Yields Threaten AI Infrastructure Financing Costs

Rising US bond yields are expected to increase borrowing costs for companies financing artificial intelligence infrastructure in the United States. The yield on 10-year US Treasury bonds has approached 5.17%, about one percentage point higher than at the start of the year, according to CNBC Top News.

JPMorgan Chase estimated that $4.1 trillion in AI-related debt obligations could be issued by 2030. Data center operators and other AI market participants are expanding capacity to meet demand for related services. Higher government bond yields mean that corporate borrowers will have to offer investors more attractive returns, making financing more expensive.

Japan's SoftBank raised $11.1 billion this week through the sale of high-yield bonds, with the yield on the seven-year tranche reaching 9.75%. CoreWeave, which actively uses debt financing, said in its quarterly report that a 100-basis-point increase in interest rates could raise its interest expenses by about $30 million.

Lender selectivity is also becoming an issue, with Riley Thompson of Mitsubishi HC Capital America stating that lenders are becoming increasingly selective about financing deals in the neocloud segment. According to him, the market is genuinely interested in about 20 such companies, rather than 50.