- Hyperscalers like Alphabet, Meta, Amazon, and Oracle have issued over $300 billion in bonds since 2025 to fund AI infrastructure.
- Nvidia and SpaceX also entered bond markets recently, with SpaceX's debt trading at junk bond levels post-IPO.
- Investor appetite for AI debt is waning, with lower demand forcing higher yields and wider spreads.
- The saturation in the dollar bond market is pushing tech giants to issue debt in other currencies, increasing borrowing costs.
- AI debt faces competition from rising U.S. Treasury debt as the federal deficit deepens.
- Stock market selloffs have hit chip stocks hard, with Nvidia losing its top market cap spot to Apple.
- The release of China's Moonshot Kimi K3 AI model raised concerns about cost competitiveness and sustainability of U.S. AI spending.
- A shift to cheaper Chinese AI models could reduce revenue for U.S. firms, potentially cutting capital expenditures and triggering a mild recession.
- Consumer spending, supported by equity gains, is at risk if stock prices decline, exacerbating economic slowdown.