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    Investor Questions AI Capex Effects on Yields and Rates

    Investor Delian Asparouhov links AI-driven capital spending to record corporate bond sales and rising yields.

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    3 Sources, 25d ago, first seen 25d ago

    TLDR

    Delian Asparouhov posted that the AI boom is producing the greatest capex supercycle ever seen. He said this has prompted record bond issuance by the largest companies, putting them in competition with the Federal Government for debt buyers and driving yields higher. In a follow-up he asked whether high yields plus heavy spending would raise inflation, leading the Fed to increase rates. Such a step, he noted, could lift treasury yields and the US debt burden further while cutting the value of AI cash flows.

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    14.7K

    3 Sources, first seen 25d ago

    Combined views

    14.7K

    3 Sources, first seen 25d ago

    103 likes
    103 likes
    14 comments
    33 saves
    5 reposts

    Sentiment

    Positive——Negative

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    14 comments
    33 saves
    5 reposts

    Sentiment

    Positive——Negative

    Summary

    Not enough discussion yet.

    No sentiment analysis available yet.

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    3 Sources

    @zebulgarOk so the AI boom Is leading to the greatest capex supercycle humanity has ever seen Which is leading to record bond issuance by the largest companies on the planet To a level where they're competing against the Federal Government for buyers of debt Which is driving yields up
    @lessinOn a pure annual-issuance basis, the AI buildout ($570B global AI debt) is now roughly the same size as the entire U.S. municipal bond market's yearly new supply ($600B) — a market that took two centuries to build vs. an AI capex cycle that's maybe 3 years old. But AI issuers are paying a real interest-rate premium (300-500+ bps in nominal terms) for money that municipalities get artificially cheap via the tax exemption.

    3 Sources

    @zebulgarOk so the AI boom Is leading to the greatest capex supercycle humanity has ever seen Which is leading to record bond issuance by the largest companies on the planet To a level where they're competing against the Federal Government for buyers of debt Which is driving yields up
    @lessinOn a pure annual-issuance basis, the AI buildout ($570B global AI debt) is now roughly the same size as the entire U.S. municipal bond market's yearly new supply ($600B) — a market that took two centuries to build vs. an AI capex cycle that's maybe 3 years old. But AI issuers are paying a real interest-rate premium (300-500+ bps in nominal terms) for money that municipalities get artificially cheap via the tax exemption.