Bloomberg Surveillance · Tuesday, September 8, 2026
Oksana Aronov from J.P. Morgan Asset Management observed that hyperscale companies are increasingly relying on debt issuance to fund their substantial CapEx, leading to negative free cash flow in some cases. She explained that while borrowing costs are rising, the math of borrowing at approximately 6% to invest at an estimated 30% return makes this strategy attractive for them.
“So hyperscalers have pretty much entirely switched to issuing debt. And we're seeing their free cash flow going negative in some cases, right? Because initially, they funded this CapEx exclusively from their cash coffers, which were enormous. And now they're funding it almost entirely through debt issuance.”
“Because they can. I mean, they're borrowing, even though their borrowing costs are going up, the math in their mind is, you know, they're spending whatever it is, 6%, but they're in the hopes of making 30.”