AI Debt Overhang and Market Stress

AI-related bonds (SpaceX, Amazon, NVIDIA) trading below par with spreads widening 5-7bp. Underwriters shifting to long-term capital at higher cost; $50-60B more supply expected post-Labor Day. Hyperscaler capex revised 30% higher, intensifying capital competition. New data: $1.65 trillion in off-balance-sheet hyperscaler debt confirms thesis, with Nvidia's $500B financing adding to the overhang. Additional $360B AI debt supply competition noted in 30Y yield analysis. DGLO article ties AI capex debt to fiscal deficit spiral and bond vigilantes. Rating agency actions and impairment risks as potential triggers. Confirms systemic risk from hyperscaler debt ($785B due 2026, $1T in 2027) and Ray Dalio's warnings of a 1929/2000-style mania.