Investors Dump 10-Year-Plus AI Bonds as Big Tech Issuance Hits $270 Billion
Updated
Updated · Financial Times · Jul 10
Investors Dump 10-Year-Plus AI Bonds as Big Tech Issuance Hits $270 Billion
3 articles · Updated · Financial Times · Jul 10
Summary
Long-dated AI-linked bonds have slid this week, making them among investment-grade credit’s worst performers as investors demand more compensation to hold 10-year-plus tech debt.
Yields show the pressure: SpaceX’s 30-year bond rose to 7.3% from 6.7% in under two weeks, while top hyperscalers’ bonds now yield about 0.6 percentage points more than similarly rated blue-chip peers.
Amazon’s $25 billion bond sale highlighted the shift, with stronger demand for five-year debt than 30-year paper; its total order book was just over $60 billion, down from more than $120 billion in March.
Fund managers say rapid technological change, uncertain returns on AI infrastructure, crowded portfolio exposure and recent tech-stock volatility make long maturities harder to justify.
Elevated short-term Treasury yields have further reduced the appeal of extending duration, even as AI-related high-grade bond issuance across currencies has nearly doubled to $270 billion this year.