TechFlow reports that on June 30, Apollo Chief Economist Torsten Slok warned that AI hyperscalers are issuing debt financing on a large scale, which may be diverting market demand for US Treasury bonds and other credit assets. The current scale of AI-related bond issuance is expected to reach approximately $700 billion, raising concerns about how the market will digest such a huge new supply, which could create a "crowding-out effect" on other fixed-income assets.
Torsten Slok believes that if AI infrastructure financing continues to expand, the capital allocation structure of the bond market may change, thereby putting pressure on demand for US Treasuries and overall credit market liquidity.
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