Alphabet $85B equity sale and SpaceX $75B IPO raise concern
Big names like Alphabet and SpaceX just pulled off huge equity sales: Alphabet brought in $85 billion, while SpaceX made headlines with a $75 billion initial public offering this June.
OpenAI and Meta might be next.
These moves help them raise cash for ambitious projects but also hint at bigger spending and rising debt.
As Tom Murphy, head of investment grade credit at Columbia Threadneedle, put it, "The amount of capital expenditure... is probably going to go up."
Investors, though, seem wary, bond prices for these companies have dropped.
JPMorgan forecasts $5.5T AI infrastructure investment
Risk premiums on top tech bonds have climbed, showing investors want more reward for taking on extra risk.
JPMorgan now expects AI and data center investments to hit $5.5 trillion by 2030, a jump of $400 billion from earlier forecasts.
Even with big cash reserves (SpaceX has over $100 billion), companies could burn through their funds fast as they race to lead in AI and data infrastructure.