Bank of America projects that, assuming approximately $200 billion in USD-denominated bonds are issued in 2026 and 2027 respectively, the debt of Amazon, Meta, Microsoft, Google, and Oracle included in the US investment-grade index will increase from $288 billion at the end of 2025 to $659 billion at the end of 2027, an increase of approximately 129%. London Stock Exchange data shows that since 2026, global bond issuance by AI giants has exceeded $220 billion, with many maturities extended to 20-30 years. This will indeed compete with government bonds for long-term funds from pension funds, insurance companies, and asset management institutions, marginally pushing up real interest rates and term premiums.
US Treasury data shows that overseas investors still net bought $207.1 billion in long-term US securities in June; Alphabet's latest A$5.5 billion bond issuance received over A$18 billion in subscriptions, indicating that funds are still available. However, faced with the simultaneous expansion of US Treasuries and AI bonds, investors are demanding higher yields and larger amounts of new bonds.
