The risk premium on high-grade US tech bonds widened to 0.79 percentage points in June, up from 0.74 percentage points at the end of May, according to All-Weather Finance. The move signals that bond investors are repricing risk on the AI infrastructure buildout at a pace not seen since the dot-com era.
“This tells us that their capital expenditure scale may continue to rise,” Tom Murphy, Head of Investment Grade Credit at Columbia Threadneedle, told All-Weather Finance.
The concern is straightforward: tech giants already generate strong operating cash flows. Their eagerness to raise additional capital at massive scale suggests AI spending will exceed even their own prior guidance. For bondholders, more equity raises today mean more debt issuance tomorrow.
SpaceX Bonds Sell Off, Alphabet Weakens
The skepticism is already showing up in prices. SpaceX completed a $25 billion bond issue last week, and traders watched the price drop faster than expected. By Friday afternoon, the book loss on those bonds relative to US Treasuries had expanded to approximately $360 million, according to All-Weather Finance.
Alphabet’s bonds also softened after news of its $85 billion equity sale. Meta is planning equity financing. OpenAI is reportedly considering an IPO as early as next year, following Anthropic.
J.P. Morgan Raises the Stakes
J.P. Morgan’s latest forecast projects total AI and data center spending will reach $5.5 trillion by 2030, approximately $400 billion higher than its November estimate. Investment-grade bond financing for data centers over the next five years is now expected to hit $2.1 trillion, up 40% from the prior forecast of $1.5 trillion, according to All-Weather Finance.
The numbers illustrate a structural tension: equity raises and debt issuance are not substitutes but complements. “Bondholders tend to cheer announcements of equity fundraising, seeing them as a sign that balance sheet deterioration is slowing,” said Anthony Woodside, Head of Multi-Sector Fixed Income at L&G Asset Management America. “But actually, this means more debt will follow.”
Not all credit investors are bearish. Arvind Narayanan, Co-Head of Investment Grade Credit at Vanguard, called tech equity sales “a very positive signal” for bond investors, arguing that management willingness to accept shareholder dilution reflects confidence in AI plans.
Maturity Risk Compounds the Picture
Beyond volume, the maturity profile is adding pressure. SpaceX issued 20-year and 30-year bonds. Nvidia issued $25 billion in bonds across multiple maturities. Alphabet issued a 100-year pound-denominated bond in February.
“They can flood the market with a lot of debt, but the price is ever higher spreads,” said Jeff Schrom, Credit Strategist at Robert W. Baird.
Buying decades-long tech bonds means accepting technology obsolescence risk over a timeline the industry has never navigated before. The credit market is now pricing that uncertainty explicitly.
The Broader Signal
The spread widening arrives alongside a separate warning from the Bank for International Settlements, which flagged AI investment structures bearing similarities to the circular financing patterns that preceded the 2008 financial crisis. Where the BIS concern is systemic, the credit spread data is granular: individual bond buyers are demanding higher compensation for individual issuers, and some are turning to overseas markets to avoid overwhelming US buyers with supply.
Asset management firms are becoming more selective, demanding higher yields on AI bonds and scrutinizing whether the ROI timeline on infrastructure spending justifies the debt load. The question for agent builders and AI infrastructure operators is whether the capital pipeline that funds their compute will sustain current pace, or whether bond market discipline forces a recalibration in spending plans.