THE IDEA IN ONE LINE
When everyone borrows at once, borrowing gets dearer.
The riskier the borrower, the more interest lenders ask.
$220bnBig Tech bonds in a year
5.24%10-year US government yield
3.16extra points for riskier firms
$40bnSpaceX's planned borrowing
Building artificial intelligence takes huge buildings full of computers, called data centres. They cost so much that even the richest companies in the world are borrowing to pay for them.
This guide explains, step by step, how a company borrows, what lenders charge, and why that charge has started to rise.
Tech giants are borrowing record amounts. When many borrowers ask for money at once, lenders can ask for more interest. That extra interest has risen a little since the summer.
Why would rich companies borrow?
Because the bills are enormous. Analysts expect the biggest cloud companies to spend up to $800 billion this year on buildings, chips and power, according to The Motley Fool. Paying all of that from cash would leave little for anything else, so companies borrow part of it, the way a family takes a mortgage instead of paying for a house in one go.
They borrow mainly by selling bonds. A bond is an IOU: you lend a company money today, it pays you interest every year, and it gives your money back at the end.
| Who | How much | What we know |
|---|---|---|
| Alphabet, Amazon, Meta, Microsoft and Oracle | About $220 billion | Bonds sold in the year to September 2026 to pay for data centres, according to Reuters. |
| SpaceX | $40 billion | Plans to borrow $30 billion in bonds and $10 billion from banks to buy Nvidia chips; the deal is reported to close in 2027 (The Motley Fool). |
| Broadcom | Tens of billions | Early talks to finance OpenAI's purchases of custom chips; reports range from about $30 billion to more than $50 billion (TrendForce). |
The extra interest: what lenders charge
The safest borrower in the United States is the US government. On 9 Oct 2026, it paid 5.24% a year to borrow for 10 years (FRED).
Companies pay that plus something extra, because a company is more likely than the government to fail to pay back. Professionals call the extra the spread. Large, safe companies paid about 0.83 points more on average; riskier companies, about 3.16 points more.
Optional: the extra interest on a $1,000 loan
Lend $1,000 for one year at each rate:
US government: $1,000 × 5.24% = $52.40
Large, safe company: $1,000 × 6.07% = $60.70
Riskier company: $1,000 × 8.40% = $84.00
The difference is what lenders are paid for taking the risk. These use the average extra yield of each group; a real company's bond can pay more or less.
Why the extra interest is rising
Think of a market stall. If one person wants to sell apples, buyers pay a fair price. If ten people turn up with apples on the same morning, buyers can ask for a discount. Bonds work the same way: when many companies want to borrow at once, lenders can ask for more interest.
The extra interest lenders ask for has crept up since summer
Extra yield over US government bonds, in percentage points, weekly
- Riskier companies (high yield)
- Large, safe companies (investment grade)
See the data
| Week ending | Riskier companies | Large, safe companies |
|---|---|---|
| 5 Jan 2024 | 3.68 | 1.09 |
| 12 Jan 2024 | 3.56 | 1.02 |
| 19 Jan 2024 | 3.54 | 1.01 |
| 26 Jan 2024 | 3.39 | 0.97 |
| 2 Feb 2024 | 3.47 | 1.02 |
| 9 Feb 2024 | 3.33 | 1.00 |
| 16 Feb 2024 | 3.34 | 0.96 |
| 23 Feb 2024 | 3.23 | 0.95 |
| 1 Mar 2024 | 3.32 | 1.01 |
| 8 Mar 2024 | 3.26 | 0.99 |
| 15 Mar 2024 | 3.16 | 0.93 |
| 22 Mar 2024 | 3.08 | 0.92 |
| 31 Mar 2024 | 3.15 | 0.94 |
| 5 Apr 2024 | 3.18 | 0.92 |
| 12 Apr 2024 | 3.25 | 0.92 |
| 19 Apr 2024 | 3.37 | 0.94 |
| 26 Apr 2024 | 3.16 | 0.90 |
| 3 May 2024 | 3.08 | 0.89 |
| 10 May 2024 | 3.12 | 0.89 |
| 17 May 2024 | 3.09 | 0.89 |
| 24 May 2024 | 3.11 | 0.89 |
| 31 May 2024 | 3.20 | 0.88 |
| 7 Jun 2024 | 3.15 | 0.90 |
| 14 Jun 2024 | 3.29 | 0.95 |
| 21 Jun 2024 | 3.21 | 0.96 |
| 30 Jun 2024 | 3.21 | 0.96 |
| 5 Jul 2024 | 3.27 | 0.92 |
| 12 Jul 2024 | 3.19 | 0.92 |
| 19 Jul 2024 | 3.09 | 0.93 |
| 26 Jul 2024 | 3.10 | 0.95 |
| 2 Aug 2024 | 3.72 | 1.06 |
| 9 Aug 2024 | 3.49 | 1.05 |
| 16 Aug 2024 | 3.29 | 0.98 |
| 23 Aug 2024 | 3.19 | 0.96 |
| 31 Aug 2024 | 3.17 | 0.96 |
| 6 Sep 2024 | 3.39 | 0.99 |
| 13 Sep 2024 | 3.37 | 0.99 |
| 20 Sep 2024 | 3.15 | 0.93 |
| 27 Sep 2024 | 3.14 | 0.92 |
| 4 Oct 2024 | 2.89 | 0.87 |
| 11 Oct 2024 | 2.98 | 0.84 |
| 18 Oct 2024 | 2.88 | 0.83 |
| 25 Oct 2024 | 2.89 | 0.85 |
| 1 Nov 2024 | 2.83 | 0.86 |
| 8 Nov 2024 | 2.63 | 0.77 |
| 15 Nov 2024 | 2.72 | 0.80 |
| 22 Nov 2024 | 2.61 | 0.80 |
| 30 Nov 2024 | 2.74 | 0.83 |
| 6 Dec 2024 | 2.67 | 0.81 |
| 13 Dec 2024 | 2.68 | 0.78 |
| 20 Dec 2024 | 2.86 | 0.82 |
| 27 Dec 2024 | 2.84 | 0.81 |
| 3 Jan 2025 | 2.81 | 0.83 |
| 10 Jan 2025 | 2.81 | 0.83 |
| 17 Jan 2025 | 2.64 | 0.82 |
| 24 Jan 2025 | 2.60 | 0.80 |
| 31 Jan 2025 | 2.68 | 0.82 |
| 7 Feb 2025 | 2.67 | 0.84 |
| 14 Feb 2025 | 2.62 | 0.80 |
| 21 Feb 2025 | 2.78 | 0.81 |
| 28 Feb 2025 | 2.87 | 0.88 |
| 7 Mar 2025 | 2.97 | 0.89 |
| 14 Mar 2025 | 3.25 | 0.94 |
| 21 Mar 2025 | 3.21 | 0.92 |
| 28 Mar 2025 | 3.47 | 0.94 |
| 4 Apr 2025 | 4.45 | 1.14 |
| 11 Apr 2025 | 4.26 | 1.18 |
| 17 Apr 2025 | 4.02 | 1.11 |
| 25 Apr 2025 | 3.67 | 1.04 |
| 2 May 2025 | 3.60 | 1.06 |
| 9 May 2025 | 3.53 | 1.02 |
| 16 May 2025 | 3.16 | 0.93 |
| 23 May 2025 | 3.40 | 0.93 |
| 31 May 2025 | 3.32 | 0.92 |
| 6 Jun 2025 | 3.09 | 0.87 |
| 13 Jun 2025 | 3.18 | 0.88 |
| 20 Jun 2025 | 3.13 | 0.88 |
| 27 Jun 2025 | 3.02 | 0.88 |
| 4 Jul 2025 | 2.80 | 0.80 |
| 11 Jul 2025 | 2.97 | 0.83 |
| 18 Jul 2025 | 2.93 | 0.80 |
| 25 Jul 2025 | 2.84 | 0.78 |
| 1 Aug 2025 | 3.13 | 0.82 |
| 8 Aug 2025 | 2.94 | 0.80 |
| 15 Aug 2025 | 2.88 | 0.75 |
| 22 Aug 2025 | 2.88 | 0.77 |
| 31 Aug 2025 | 2.84 | 0.81 |
| 5 Sep 2025 | 2.83 | 0.79 |
| 12 Sep 2025 | 2.79 | 0.77 |
| 19 Sep 2025 | 2.72 | 0.74 |
| 26 Sep 2025 | 2.75 | 0.75 |
| 3 Oct 2025 | 2.80 | 0.75 |
| 10 Oct 2025 | 3.18 | 0.81 |
| 17 Oct 2025 | 3.04 | 0.80 |
| 24 Oct 2025 | 2.88 | 0.77 |
| 31 Oct 2025 | 2.94 | 0.80 |
| 7 Nov 2025 | 3.15 | 0.84 |
| 14 Nov 2025 | 3.07 | 0.83 |
| 21 Nov 2025 | 3.19 | 0.86 |
| 30 Nov 2025 | 2.92 | 0.82 |
| 5 Dec 2025 | 2.85 | 0.79 |
| 12 Dec 2025 | 2.91 | 0.80 |
| 19 Dec 2025 | 2.90 | 0.80 |
| 26 Dec 2025 | 2.86 | 0.79 |
| 2 Jan 2026 | 2.83 | 0.79 |
| 9 Jan 2026 | 2.74 | 0.78 |
| 16 Jan 2026 | 2.65 | 0.75 |
| 23 Jan 2026 | 2.68 | 0.73 |
| 31 Jan 2026 | 2.88 | 0.75 |
| 6 Feb 2026 | 2.87 | 0.76 |
| 13 Feb 2026 | 2.95 | 0.79 |
| 20 Feb 2026 | 2.86 | 0.78 |
| 28 Feb 2026 | 3.12 | 0.86 |
| 6 Mar 2026 | 3.13 | 0.84 |
| 13 Mar 2026 | 3.28 | 0.93 |
| 20 Mar 2026 | 3.24 | 0.88 |
| 27 Mar 2026 | 3.42 | 0.91 |
| 3 Apr 2026 | 3.13 | 0.86 |
| 10 Apr 2026 | 2.94 | 0.82 |
| 17 Apr 2026 | 2.83 | 0.80 |
| 24 Apr 2026 | 2.86 | 0.80 |
| 1 May 2026 | 2.77 | 0.81 |
| 8 May 2026 | 2.81 | 0.79 |
| 15 May 2026 | 2.80 | 0.75 |
| 22 May 2026 | 2.74 | 0.74 |
| 31 May 2026 | 2.74 | 0.74 |
| 5 Jun 2026 | 2.76 | 0.74 |
| 12 Jun 2026 | 2.71 | 0.74 |
| 19 Jun 2026 | 2.66 | 0.74 |
| 26 Jun 2026 | 2.83 | 0.77 |
| 3 Jul 2026 | 2.74 | 0.75 |
| 10 Jul 2026 | 2.69 | 0.77 |
| 17 Jul 2026 | 2.73 | 0.79 |
| 24 Jul 2026 | 2.79 | 0.80 |
| 31 Jul 2026 | 2.85 | 0.79 |
| 7 Aug 2026 | 2.70 | 0.78 |
| 14 Aug 2026 | 2.67 | 0.80 |
| 21 Aug 2026 | 2.70 | 0.81 |
| 28 Aug 2026 | 2.60 | 0.79 |
| 4 Sep 2026 | 2.68 | 0.81 |
| 11 Sep 2026 | 2.65 | 0.80 |
| 18 Sep 2026 | 2.68 | 0.77 |
| 25 Sep 2026 | 2.93 | 0.81 |
| 2 Oct 2026 | 3.10 | 0.85 |
| 9 Oct 2026 | 3.11 | 0.83 |
| 13 Oct 2026 | 3.16 | 0.83 |
The extra yield on riskier company bonds fell to 2.60 points in late August and was back at 3.16 by mid-October. It is still below its 2026 high of about 3.4 points in March, a month after the war with Iran began. So this is a creep, not a panic.
There are signs that the AI borrowing itself plays a part. In late 2025, when Alphabet and Meta sold giant bond deals, investors made them pay an extra 0.10 to 0.15 points above their existing bonds, according to Janus Henderson Investors. And the cost of insuring SpaceX's debt against default rose by 76% between early June and mid-October, from $11,000 to $19,400 a year per $1 million of debt, according to The Motley Fool.
Why it matters to you
- Share prices. If borrowing gets dearer, AI projects cost more, and investors may pay less for the companies doing them.
- Savings and pensions. Many pension and bond funds hold company bonds. Higher interest is good for new money lent, but existing bonds lose value when rates rise.
- Your own loans. Company spreads do not set your mortgage rate directly; the government's 10-year rate matters more. Our report on the US economy in five charts shows mortgage rates at their highest since 2023.
What this does not tell you
- The spreads in the chart are averages across hundreds of companies in every industry, not only technology.
- The SpaceX and Broadcom figures are reported talks; final amounts can change.
- Nobody knows whether the AI spending will pay off. This guide explains borrowing costs; it is not investment advice.
Sources
- Reuters via Insider Monkey/Yahoo Finance: Big Tech issued about $220 billion of bonds (September 2026)
- Janus Henderson Investors: Mega-issuance and the AI arms race (November 2025)
- The Motley Fool: Bond investors are wary of SpaceX's borrowing binge (13 October 2026)
- TrendForce: Broadcom reportedly eyes tens of billions to fund OpenAI (8 October 2026)
- ICE BofA US High Yield option-adjusted spread, via FRED
- ICE BofA US Corporate option-adjusted spread, via FRED
- 10-year US Treasury yield, via FRED
Spreads and yields are market data that change daily. Educational content, not investment advice.