This week, Treasury yields have surged, reaching levels not seen since 2007, which will likely lead to higher borrowing costs for companies that rely on debt financing. JPMorgan Chase has projected that $4.1 trillion in AI-related debt will be issued by 2030 as firms in the data center and AI sectors strive to expand their capabilities to meet growing demand.
Currently, the 10-year Treasury yield is approximately 5.17%, an increase of about 1 percentage point since the beginning of the year. This rise means that companies will need to offer more attractive returns to entice investors when they issue new debt.
While the market is not in a state of panic, the implications of these rising costs could significantly affect the pace and scale of AI infrastructure investments