Investors offload long‑dated AI debt as yields climb and risk premiums widen. The 30‑year Space X bond now yields 7.3 %, up from 6.7 % when sold two weeks ago. Hyperscaler bonds, including Amazon, Google, Meta, Microsoft and Oracle, trade at a 0.6 percentage‑point premium over comparable blue‑chip issuers, the widest sectorial spread in the investment‑grade market.

Amazon’s latest $25 bn issuance shows marked demand erosion at the long‑end. Its five‑year notes attracted about 20 % more orders than the 30‑year tranche, with the latter yielding >6.1 % versus 4.8 % for the shorter term. The total order book rose to just over $60 bn, a sharp decline from the $120 bn book in March. The company has now raised nearly $90 bn, leaving portfolios with heavy AI exposure scrambling to free capital.

Portfolio managers cite evolving tech landscapes and uncertain AI returns as key concerns. Mariya Entina of Double Line notes a preference for near‑term risks when long‑term AI pay‑offs remain unclear. Capital Group’s Pramod Atluri echoes that rapid innovation makes long‑dated lending fraught.

Fed policy tightening and higher Treasury yields further erode long‑term AI appeal. Investors seek attractive yields without extended duration, dampening appetite for new hyperscaler debt. The shift signals a cautious recalibration of exposure to AI infrastructure funding, tightening liquidity for future tech issuances and tightening the risk‑return profile of the sector.