Tech Giants' Financing Booms Keep Breaking Records, 30-Year US Treasury Yield Hits Nearly 20-Year High! AI Supercycle Enters New Phase of "Capital Equals Computing Power"

According to Zhihu Financial News APP, the issuance scale of US investment-grade bonds has set monthly historical records for three consecutive months, highlighting the fastest pace of bond issuance ever in the US high-rating bond market, as AI infrastructure construction spending prompts companies to borrow heavily. With record-breaking bond issuance from AI hyperscalers like Google’s parent company Alphabet, as well as Amazon and Meta, an unprecedented AI investment boom has triggered a critical shift in financing paradigm: from “tech giants building AI using their sustained strong free cash flow” to “global capital markets jointly financing large tech giants’ AI super factories.” However, this AI financing boom is also driving long-term US Treasury yields—10 years and even 30 years—continuously higher.

According to the latest compiled statistics from Bloomberg News, as of this Monday, the supply of US high-rated bonds in August has reached $145.2 billion, exceeding the previous monthly record of $136 billion set in August 2020. Earlier this year, January, June, and July each set historical monthly records for bond issuance, and an additional three months recorded their respective second-busiest high-grade corporate bond issuance levels.

From a broader perspective, AI hyperscalers such as Alphabet, Amazon, and Meta have issued nearly $220 billion in bonds so far this year, more than double the $108 billion for the full year of 2025. This represents a historical high volume or a record issuance pace for the equivalent period, based on available comparable data.

Notably, 2025 itself is already much higher than the historical norm—according to Bank of America, the five largest hyperscalers are expected to issue $121 billion in US corporate bonds throughout 2025, while the annual average was only about $28 billion from 2020 to 2024. In other words, the issuance volume in just the first eight months of 2026 has already significantly exceeded the normal level of any prior complete year; thus, both in terms of issuance speed and cumulative scale, this marks a record, unprecedented AI debt financing cycle.

Moreover, Wall Street financial giant Morgan Stanley expects global AI-related debt financing to approach $570 billion in 2026. These figures not only reinforce the financial certainty of AI infrastructure investment, but also mean that capital costs, long-term (10-year or longer) US Treasury yields, and ROIC will become the core pressure tests for the next phase of the AI bull market.

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The flood of bond issuance has prompted investors to become more discerning about which bonds to buy and at what price. This was especially evident last week: the proportion of initial subscription orders that were ultimately withdrawn rose sharply. Still, companies have not been deterred from entering the debt market for financing, with an additional $9.1 billion in bonds scheduled for issuance on Monday. There were 12 deals in total that day, including 2 from private credit funds.

As shown above, high-grade bond issuance has once again set a new monthly record—August is the fourth month this year to hit a historical high.

This month’s issuance is led by Google’s parent company Alphabet Inc., with a $25 billion bond offering. This marks the eighth bond deal this year with a scale of $25 billion or more, all from tech companies. More deals are expected to follow soon. JP Morgan recently raised its forecast for 2026 technology, media, and telecom (TMT) USD bond issuance by about 20% to $540 billion.

Based on roughly aggregated latest disclosed amounts from the media, Alphabet raised $31.51 billion in February through USD, GBP, and CHF markets, issued 9 billion euros (approximately $10.6 billion) + 8.5 billion Canadian dollars (about $6.2 billion) + 576.5 billion yen (about $3.6 billion) in May, and completed another $25 billion in USD bonds in August. Excluding a proposed AUD bond, Alphabet’s publicly raised bond financing has already reached about $76.9 billion in 2026; the latest update shows that Alphabet is preparing to enter the AUD-denominated corporate bond market for the first time, with maturities up to 20 years.

August also saw a $10 billion bond issue by US healthcare giant AbbVie Inc. for acquisition financing, and a $6.75 billion bond issue by financial heavyweight HSBC Holdings Plc. Last week, one of Nvidia's top rivals in the AI chip sector—AI and PC chip giant AMD—raised $4.75 billion, setting a new record for dollar bond issuance by this chipmaker.

The debt capital market typically becomes more active at the beginning of September, especially after the US Labor Day holiday. Since the start of the year, bond supply has reached $1.46 trillion, up 8.5% from the same period in 2020—when the COVID-driven bond issuance wave set a full-year historical record. In 2026, global debt financing activity is similarly heating up, with cumulative syndicated public bond sales reaching $5 trillion at an unprecedented pace.

The Flood of Tech Giant Bond Issuance Collides with the US Government's Ongoing Fiscal Deficit Expansion, Driving 30-Year US Treasury Yields to Their Highest since 2007

As outlined above, the historic AI investment boom has already triggered a critical financing paradigm shift: from “tech giants building AI with their own free cash flow (Free Cash Flow)” to “the global capital market jointly financing AI factories.”

According to data compiled by Bloomberg News, US investment-grade bond issuance in August alone reached $145.2 billion, setting a new record for the month. This series of latest debt offerings not only strongly validates the certainty of AI computing power demand and capital expenditure, but also means that AI has upgraded from a “stock market theme” to a macro capital cycle capable of changing the pricing of global credit market funds.

What really warrants caution is that this AI financing boom is triggering an endogenous counterforce—“the bigger the AI training/inference boom, the more capital it needs, and the more expensive the capital may become.” On August 17, the 30-year US Treasury yield rose to 5.3103%, its highest since 2007. The core drivers behind this include not only the roughly $1.9 trillion US fiscal deficit (about 6% of GDP) and energy/inflation risks, but also the heavy issuance of long-term corporate bonds by AI companies, resulting in increased duration supply; the 30-year US real yield has also neared 3%, an 18-year high.

The economic mechanism is quite direct: the US Treasury and firms like Alphabet, Amazon, and Meta are simultaneously competing for global long-term capital—investors demand higher term premiums and real returns—long-end risk-free rates rise—corporate weighted average cost of capital (WACC) increases—the minimum return thresholds for AI data centers/GPU clusters and power/network infrastructure are pushed higher. BlackRock, a Wall Street asset management giant, has directly described this phenomenon as a rare bout of capital competition/capital scarcity in recent years. As a result, AI CapEx (capital expenditure) not only spurs economic growth and semiconductor orders, but may also, through higher bond supply, push up discount rates across the financial system—this is the most noteworthy macro feedback loop of the current AI supercycle.

However, this doesn’t mean the AI investment cycle is about to be ended by high interest rates. Rather, the next stage will see a very clear stratification in financing ability. Top hyperscalers like Alphabet, able to raise funds in USD, EUR, GBP, CHF, CAD, JPY and even AUD, show that global bond investors are still willing to provide long-term capital for their AI infrastructure; Alphabet's $20 billion USD bond in February alone attracted over $100 billion in orders, indicating that top credit entities possess strong financing power. Furthermore, recent corporate earnings and AI cloud computing demand have alleviated some market concerns over AI ROI, and Wall Street institutional investors now seem to be shifting from “is AI CapEx too high” to finding “who can consistently turn that CapEx into strong profits.”

Therefore, the real dividing line for future AI capital spending is no longer “who has the biggest ambition to spend on AI,” but rather who commands the lowest financing costs, the strongest operating cash flow, the highest GPU rental/sales utilization, and the clearest AI monetization capacity: cloud computing platforms with strong balance sheets, like Microsoft, Alphabet, and Amazon, may further expand their lead, while AI infrastructure-related tech firms heavily dependent on external financing, with high client concentration and long-term negative free cash flow, will be the first to feel the pressure of 5%+ long-end interest rates.

The current AI investment boom is best described as a “capital cost stress test for the AI supercycle,” not a signal of an AI bubble bursting. In the short term, record bond issuance means that funding sources for data centers, GPU/ASICs, HBM/DRAM/NAND storage components, optical interconnects, power and liquid cooling systems, and energy storage—all related to AI data center construction—are more secure, further strengthening the fundamentals of the AI compute power industry chain.

However, in the medium and long term, a potentially dangerous self-reinforcing loop must be watched: “Rising AI CapEx—increased AI bond issuance—rising long-term real yields and term premiums—higher discount rates and financing costs for tech companies—market demands higher ROIC—marginal AI projects are eliminated.” Some analysts even point out that real yields may continue higher until high financing costs begin to genuinely suppress borrowing and demand for risk assets. In other words, the biggest threat to the next stage of the AI super bull market may no longer be “insufficient AI compute demand,” but rather that compute demand is so strong it begins to compete with the US government for global capital—eventually pushing capital market prices too high.