Data Centers Face $1.5 Trillion Debt Squeeze as 10-Year Treasury Yield Hits 5.22%
Updated
Updated · The New York Times · Oct 2
Data Centers Face $1.5 Trillion Debt Squeeze as 10-Year Treasury Yield Hits 5.22%
3 articles · Updated · The New York Times · Oct 2
Summary
$3 trillion in A.I. infrastructure spending through 2028 is coming under pressure as higher rates threaten the economics of new data-center projects.
The 10-year Treasury yield traded at 5.22% on Friday after reaching a multi-decade high a day earlier, lifting the baseline cost for debt-backed construction.
About half of that projected spending—roughly $1.5 trillion—is expected to be financed with debt or debt-like instruments that must price at a premium to Treasuries.
S&P Global Ratings said rising Treasury yields force debt-financed projects to clear a higher hurdle rate, adding a new constraint to an industry already facing political backlash and power shortages.