Citigroup says hyperscalers are borrowing at 6% to chase 30% returns, while analysts predict AI capital spending could reach a staggering $11 trillion by 2030. The entire market is riding on a boom that's just getting started.
The tape Bloomberg Surveillance · Sep 8
“If you look at the average credit spread of those hyperscalers, it's basically tripled over the last 12 months, but it's only 66 basis points. So to your point, you had very strong free cash flow for these companies. They have issued debt. They are spending that free cash. But the bottom line is they're borrowing, you call it 6%, and they're earning, in our estimate, almost 30% on that investment.”
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