Wall Street’s finest are warning that the torrent of debt being unleashed by Silicon Valley’s biggest names could soon drown bond buyers on both sides of the Atlantic.
The culprit? A record-breaking 2025 bond binge that saw Alphabet raise $25 billion across dollars and euros, Meta pocket $30 billion in one gulp, and Oracle scoop up $18 billion faster than you can say “cloud computing.”
Demand was so feverish that Meta’s deal attracted a $125 billion order book—roughly the GDP of Qatar—yet analysts are already nervously eyeing 2026 like it’s an all-you-can-eat buffet right before closing time.
Next year, the five horsemen of the data center apocalypse—Alphabet, Amazon, Microsoft, Meta, and Oracle—are collectively expected to need $570 billion in capital spending alone. That’s up from a modest $125 billion in 2021, back when “AI” still sounded like science fiction instead of an excuse to build warehouses the size of Delaware.
JPMorgan strategist Matthew Bailey summed up the mood with the understated charm of a man watching a bathtub overflow: “Our biggest concern is supply indigestion.” Translation: too many bonds, not enough stomachs.
Even hedge funds are getting poetic. Man Group published a blog post titled “Why Bond Investors Aren’t Totally Buying the AI Hype” before warning that a glut of lower-quality issuers—some of them former Bitcoin miners who suddenly discovered electricity bills—might be “too much for markets to stomach.”
They closed with the delicious phrase “future AI slop,” which is now being printed on mugs in trading floors from London to Manhattan.
Bond buyers, usually the calmest souls in finance, have started asking the uncomfortable question: will any of this actually make money? A Massachusetts Institute of Technology report helpfully noted that 95% of companies currently get zero return from generative AI projects. Nothing says “investment opportunity” like a 5% success rate.
Yet the deals keep coming, partly because tech giants have balance sheets stronger than most countries and couldn’t care less about an extra 10 basis points. Morgan Stanley calls this a “new dynamic credit markets haven’t contended with for a long time,” which is analyst-speak for “we’re not paid enough for this nonsense.”
European investors, long starved of exciting paper, are actually licking their chops. Commerzbank’s Marco Stoeckle cheerfully declared euro buyers “essentially underinvested in high-quality US tech issuers,” proving that one continent’s indigestion is another’s five-course meal.
Still, some portfolio managers are hedging their bets the old-fashioned way—by buying derivatives that pay out if a tech titan actually defaults. Because nothing screams confidence like quietly purchasing insurance against the companies building the future.
As 2026 approaches, the fixed-income world finds itself in the unfamiliar position of begging Silicon Valley to slow down. In the bond market, it seems, even too much of a good thing can leave you feeling queasy.
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