- AI hyperscalers like Amazon are increasing capital expenditure, leading to a record bond issuance of $225 billion so far in 2026, with projections of $400 billion for the year.
- Market participants are becoming wary of rising leverage, as hyperscalers now pay higher premiums over risk-free bonds, and the federal government's near $2 trillion deficit adds to bond supply pressure.
- Hidden debt at U.S. tech giants has surged to $1.65 trillion (per Nikkei) or $1.2 trillion (per Moody's), exceeding visible debt, consisting of off-balance-sheet commitments like GPU purchase deals and data center leases.
- Despite the massive debt, Moody's rates hyperscalers' balance sheets as robust, but the shift from asset-light to asset-heavy models requires unprecedented capital raising, posing long-term risks.