Source: Marketwatch
Data center operators financed an unprecedented wave of AI infrastructure buildout through corporate debt in 2024, flooding bond portfolios with securities that underperformed as interest rates remained elevated and capex needs spiraled beyond forecasts. The mismatch between long-duration debt and accelerating infrastructure cycles compounds the problem: as operators like Hyperscale and cloud giants issue more bonds to fund next-generation chip farms, investors face diluted returns or forced allocation to riskier securities.