AI Debt Debate Intensifies as Hyperscaler Borrowing Tests Treasury Demand

AI infrastructure borrowing has become a live bond-market concern as investors weigh whether hyperscaler debt is competing with U.S. Treasuries for long-duration capital. The debate intensified as the 10-year U.S. Treasury yield touched 5.04%, its highest level since 2007, and as Bank of America's September survey of 170 global fund managers overseeing $470 billion found 33% citing a disorderly rise in bond yields as the top tail risk, ahead of 28% citing AI bubble fears.