Warsh Blames AI Hyperscaler Borrowing for Rising Treasury Yields

MacroDigital Finance Impact 4
โดย Fortune·US·Read original
Summary · why it matters

Federal Reserve Chair Kevin Warsh said the borrowing spree by AI hyperscalers is one reason long-term borrowing costs are rising, pointing to the competition for capital as the 10-year Treasury yield hit 5%. Warsh, speaking after the Fed raised its benchmark rate by a quarter point to 3.75-4%, said the so-called hyperscalers are out in the market raising funding and that the competition for capital is real. The five major hyperscalers issued $121 billion in U.S. corporate bonds in 2025, compared with an average of $28 billion a year between 2020 and 2024, according to BofA Securities, while Morgan Stanley estimates AI-related global debt reached nearly $236 billion by the end of May and forecasts it will approach $570 billion for the full year of 2026. Hyperscaler capital spending now runs close to 100% of operating cash flow, with some dipping negative, forcing the companies to turn to bond markets. Warsh also cited economic growth and geopolitics, namely the Iran war, as reasons for higher yields, but did not list the federal deficit, the explanation most bond investors give. He added that the Fed has set up an internal task force on AI, due to report by the end of the year.

Impact on stocks 10

Artificial Intelligence▼ · 5 stocks
Amazon.com Inc
AMZN
▼ NegativeCapitalrelevance

Named as one of the hyperscalers whose heavy bond issuance is driving up borrowing costs, raising its own funding expenses.

Alphabet Inc Class C
GOOG
▼ NegativeCapitalrelevance

Named as one of the hyperscalers whose heavy bond issuance is driving up borrowing costs, raising its own funding expenses.

Meta Platforms Inc.
META
▼ NegativeCapitalrelevance

Named as one of the hyperscalers whose heavy bond issuance is driving up borrowing costs, raising its own funding expenses.

Microsoft Corporation
MSFT
▼ NegativeCapitalrelevance

Named as one of the hyperscalers whose heavy bond issuance is driving up borrowing costs, raising its own funding expenses.

Financials▲ · 2 stocks
Cloud & Digital Infrastructure▲ · 1 stocks
Others▲ · 2 stocks

Theme Impact 4

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