The AI debt wave means bonds aren't boring anymore

The AI boom isn't just a stock market story. It's also a bond market story. And the bond market version may actually matter more

Paul Moseley/Fort Worth Star-Telegram/Tribune News Service via Getty Images

Bonds are boring. Except when credit breaks catastrophically, and then the whole market collapses.

For most people, even relatively sophisticated retail investors who manage their own money, those two realities make up their entire intuitive map of the $150 trillion global credit market. The second one, in particular, is less an analytical position than a visceral fear response — a leftover from 2008 that now almost goes without saying, even as it shapes reactions to any credit news that breaks into the mainstream.

With the rise of AI, however, this map needs an urgent update. Otherwise, it's almost impossible to make sense of what’s happening in finance right now: why Blue Owl fund redemptions are grabbing headlines, what experts actually mean when they warn about cracks in private credit, the real economic scale of the AI buildout, and how and why the contents of your 401(k) are quietly changing, without anyone announcing it, and without most investors ever noticing.

AI as a credit market story, not a stock market story

There are worse places to begin than with this: AI is not only a stock market story. It's also a bond market story. And the bond market version may actually matter more.

Until recently, the biggest borrowers in the U.S. investment-grade corporate bond market — a roughly $7 trillion slice of the total global credit market, but one that punches above its weight in influence — were banks. Names you know like JPMorgan $JPM and Bank of America $BAC. A familiar cast, and no wonder. Borrowing, lending, and investing is what banks do.

Now that cast is quickly changing to include tech’s biggest names, and insiders can tell you the moment the change came down.

Jason Miller, managing director and head of diversified industries at Citizens, traces it to October of last year, when developer TeraWulf priced roughly $3.2 billion for its Wolf Compute data center. When deals started getting this big, Miller said, banks that otherwise might do the lending began bumping up against internal caps on how much sectoral exposure they wanted. So would-be borrowers went looking for other sources of capital beyond bank loans. Equity financing was and is an obvious option. But bond-market financing is cheaper. “Debt financing costs roughly half what equity does,” said Neil Sun, a portfolio manager at RBC Global Asset Management.

Suddenly, the math pointed one way. And the tech crowd followed.

The defining 'under the hood' story

In the last three months of 2025, Oracle $ORCL, Meta $META, Google $GOOGL and Amazon $AMZN — the AI "hyperscalers," in analyst shorthand — issued roughly $90 billion worth of bonds between them. In a memo this January, Apollo chief economist Torsten Sløk projected that if hyperscalers finance even 20% of their planned AI capex through investment-grade bonds over the next four years, then the........

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