As AI Companies Borrow Billions, Debt Investors Grow Wary

While stock investors have pushed AI-related shares to repeated highs this year, debt markets are telling a more cautious story as newer AI infrastructure companies find themselves paying significantly elevated interest rates to borrow money. Applied Digital, a data center builder, sold $2.35 billion of debt in November at a 9.25% coupon — roughly 3.75% above similarly rated companies, or about 70% more in interest costs. The pattern has repeated across several deals.

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