The artificial-intelligence investment cycle is increasingly becoming a bond-market story as well as an equity-market story. The latest analysis from J.P. Morgan highlights the scale of borrowing by major hyperscalers and NVIDIA, suggesting that the companies’ growing demand for long-duration financing could compete directly with the U.S. Treasury for the same pool of institutional capital.

AI Infrastructure Is Creating an Unprecedented Wave of Corporate Debt

The scale of the borrowing is significant. J.P. Morgan’s analysis indicates that the five major hyperscalers — Alphabet, Amazon, Meta, Microsoft and Oracle — together with NVIDIA are approaching roughly $300 billion of new investment-grade debt issuance in 2026 by August, with the broader measure including relevant special-purpose vehicles bringing the figure toward $320 billion. The comparison is particularly notable because these companies historically relied heavily on internal cash generation to finance capital expenditure.

The shift reflects the extraordinary cost of building AI infrastructure. Data centers, GPUs, networking equipment, power infrastructure and long-term capacity commitments require substantially more capital than traditional software investment. J.P. Morgan Asset Management estimates that hyperscalers issued approximately $121 billion of bonds in 2025 and expected issuance to rise to around $250 billion in 2026 as debt finances a larger share of capital expenditure.

Other estimates underline the scale of the transformation. Vanguard reported that the five hyperscalers had issued approximately $132 billion year-to-date by July 31, while estimates for total AI-related debt across the broader ecosystem ranged from roughly $300 billion to $570 billion for 2026.

Why the Treasury Market Is Increasingly Relevant

The critical issue is not simply how much technology companies are borrowing, but where they are competing for capital. J.P. Morgan’s analysis shows hyperscaler and NVIDIA long-duration debt issuance, including selected SPVs, reaching close to 70% of Treasury bond issuance on the comparable measure in 2026. That is a dramatic increase from approximately 30% in 2025 and less than 10% several years earlier.This does not mean technology companies are literally replacing the U.S. government as the dominant borrower. Treasury issuance remains vastly larger when all maturities and instruments are considered. The significance lies in the competition for investors seeking longer-duration, high-quality fixed-income assets.

Major technology companies generally enter the market with strong credit ratings and substantial cash-generating businesses. Consequently, investors may find their bonds attractive relative to Treasuries when the additional yield is sufficient. As supply increases, however, issuers can face pressure to offer greater concessions to attract buyers.

Reuters reported in July that Amazon, Alphabet, Meta and Oracle had issued approximately $194 billion of bonds during 2026 through July 7, up 79% from roughly $108 billion during all of 2025. Reuters also reported that technology bond spreads had begun widening as investors became more selective amid the growing supply.Higher Yields Could Become a Constraint on the AI Buildout

The implications extend beyond the bond market. If the supply of corporate debt continues rising faster than investor demand, companies may need to pay progressively higher borrowing costs. That would increase the cost of financing the very infrastructure that is driving the current AI expansion.

J.P. Morgan estimates that hyperscaler issuance could reach approximately $279 billion in 2026, with another $220 billion to $300 billion potentially coming in 2027. The firm has warned that hyperscalers could approach 10% of the U.S. investment-grade market by 2030 if the borrowing cycle continues.

The Bank of England has similarly identified the rapid expansion of hyperscaler credit as a developing financial-stability issue. Its July 2026 Financial Stability Report said the five major AI hyperscalers accounted for more than 15% of year-to-date U.S. dollar investment-grade issuance as of early May, despite representing only about 3% of outstanding U.S. investment-grade debt at the end of 2025.

For global investors, including institutions in Israel with exposure to U.S. fixed income, the development creates a broader portfolio consideration. Higher long-term Treasury yields can influence global borrowing costs, corporate bond spreads, mortgage rates and the valuation of long-duration equities. At the same time, strong demand for AI infrastructure could continue supporting credit issuance if investors remain comfortable with the balance sheets of the largest technology companies.

The critical variable now is whether AI-related capital spending generates sufficient cash flow to justify the rising debt burden. If investor demand keeps pace, the additional issuance can be absorbed without a major disruption. If supply continues accelerating while demand weakens, the resulting rise in required yields could become an increasingly important constraint on both the AI investment cycle and the broader U.S. bond market.