Tech Giants Issue $300B in AI Bonds as Investor Appetite Wanes

Debt surge meets cooling demand

Major technology companies have turned to bond markets at an unprecedented scale to finance artificial intelligence infrastructure investments, but signs of market fatigue are emerging. Alphabet, Meta, Amazon, and Oracle collectively issued more than $300 billion in bonds since the start of 2025, according to calculations detailed by Fortune.

Nvidia, the dominant AI chip manufacturer, returned to bond markets last month with a $25 billion offering—its first debt sale in five years. SpaceX, now positioned as an AI player following its acquisition of xAI, raised $25 billion in bonds shortly after completing a record $86 billion initial public offering.

The top five hyperscalers are projected to issue $300 billion in bonds annually in coming years, up from $175 billion in 2026. JPMorgan estimates these companies will collectively raise $375 billion in debt proceeds between 2026 and 2030.

Investor pushback intensifies

Demand signals suggest bond buyers are becoming more selective. Amazon's $25 billion bond sale earlier this month required the company to offer 18 to 21 basis points of additional yield on longer-dated securities. Order levels reached only 2.5 times the bonds offered, down from 3.2 times in March.

The cover ratio for hyperscaler bonds—measuring investor orders per dollar of bonds issued—has collapsed from nearly 5x in February 2026 to below 2x in July, according to Torsten Slok, chief economist at Apollo Global. Investment-grade bonds overall saw their cover ratio decline by only about half a point during the same period.

"Investors are pushing back," Bank of America noted, warning the trend "should also inject even more uncertainty into the hyperscaler/AI supply outlook."

Tech companies have begun issuing debt in currencies beyond the dollar as the U.S. bond market reaches saturation. This shift, combined with weakening demand, means borrowing costs are rising. Hyperscaler debt must also compete with surging Treasury issuance as the federal deficit tracks toward $2 trillion this fiscal year.

Market stress spreads beyond bonds

Weakness in primary debt markets is affecting secondary trading. SpaceX bonds have sold off significantly, with yields climbing to levels typically associated with junk-rated securities.

Equity markets are experiencing parallel turbulence. SpaceX shares have fallen below their $135 IPO price and now trade 45 percent below their peak, which briefly valued the company above Microsoft. Semiconductor stocks have absorbed heavy losses, with Nvidia losing its position as the world's most valuable company to Apple.

The release of the Kimi K3 model from Chinese startup Moonshot has amplified concerns. The model reportedly outperformed offerings from OpenAI and Anthropic at substantially lower cost, raising questions about whether current infrastructure spending levels remain justified if users migrate to cheaper alternatives.

Why it matters

AI-related investment has accounted for more than half of real GDP growth in recent quarters, making the sector's financial health a macroeconomic concern. Citi Research warned that a pullback in AI capital expenditures could trigger a mild recession, particularly if declining equity prices reduce consumer spending from already-low savings rates. The bond market's capacity to absorb continued hyperscaler issuance will directly influence whether companies can sustain their infrastructure buildout at planned levels.

These details were first reported by Fortune.