AI infrastructure borrowing costs rise as Treasury yields increase
AI infrastructure faces higher borrowing costs as Treasury yields rise See how funding pressure could reshape data center expansion and tech spending
Rising Treasury yields are making debtfinanced AI infrastructure more expensive, adding pressure to companies building data centers and related capacity. JPMorgan estimated in June that AIrelated debt issuance could reach $4.1 trillion through 2030 as firms race to expand for growing demand.
The 10year Treasury yield has climbed to about 5.17%, its highest level since 2007, which means borrowers may need to offer higher returns to attract investors. The article notes that some large tech companies, including Amazon, Google, Meta and Microsoft, can still borrow more cheaply because of their investmentgrade credit ratings.
Smaller or more leveraged AIfocused companies may face more difficulty. CoreWeave has warned in filings that higher rates could lift interest expense, and Oracle has faced investor concerns after reports about a possible force majeure notice tied to one of its data center projects. Even so, market participants said demand for AI capacity remains strong and borrowing appetite has not slowed sharply yet.