Media365
The Magnificent Seven’s combined debt surged 45% to $578 billion by mid-2026 amid rising AI investments. Higher bond yields could put $1.67 trillion-$2 trillion of their combined market value at risk, SBI Research warns.
The artificial intelligence (AI) boom is pushing some of the world’s biggest technology companies deeper into debt, with borrowing by the Magnificent Seven rising nearly 45 per cent to $578 billion by mid-2026, according to a report by SBI Research.
The combined debt of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla stood at around $399 billion in 2025. Their borrowing has now climbed to nearly 1.7 times the level recorded in 2023, highlighting the growing financial commitments involved in the race to build AI infrastructure.
The surge in debt comes as technology companies ramp up investments in data centres, computing capacity and other infrastructure required to support the rapid expansion of artificial intelligence.
SBI Research also flagged substantial off-balance-sheet commitments, including obligations linked to purchases and investments, which could add to the financial risks associated with the AI expansion.
Rising bond yields pose valuation risks
The report cautioned that higher borrowing costs and rising US Treasury yields could put pressure on the valuations of major technology companies by increasing the discount rate applied to their future earnings.
Using an equity duration approach, SBI Research estimated that a rise in bond yields could trigger a potential decline of $1.67 trillion to $2 trillion in the combined market capitalisation of the Magnificent Seven.
More from BusinessThe seven companies have a combined market value estimated at approximately $23 trillion, making them particularly sensitive to changes in interest rates and investor expectations about future earnings.
Higher yields can reduce the present value of future corporate earnings, potentially putting pressure on the share prices of companies whose valuations depend heavily on expectations of long-term growth.
Anthropic IPO could test the AI boom
The report also pointed to the expected entry of artificial intelligence company Anthropic into public equity markets, likely around November 12, with a targeted valuation of $1.5 trillion to $2 trillion.
SBI Research described the proposed listing as a “high-stakes litmus test” for the financial viability of the AI boom.
A public listing would give investors an opportunity to assess whether the company’s enterprise revenues can justify the substantial infrastructure and computing costs associated with developing and deploying advanced AI models.
The outcome could offer important signals about investor appetite for AI companies and whether the massive capital expenditure driving the sector can translate into sustainable earnings.
Rising US yields add to Federal Reserve’s unrealised losses
Beyond technology companies, SBI Research highlighted the impact of rising bond yields on the US Federal Reserve’s holdings of government securities.
The Fed’s unrealised losses on Treasury holdings increased by $26.3 billion, from $535.3 billion in December 2025 to $561.5 billion in June 2026.
During the same period, the US 10-year Treasury yield climbed from 4.18 per cent to 4.44 per cent.
Higher yields reduce the market prices of existing bonds, lowering the market value of Treasury securities held by the Federal Reserve and increasing unrealised losses, the report said.
However, SBI Research clarified that the decline in the Federal Reserve’s total assets largely reflected securities runoff under its quantitative tightening programme, rather than an automatic write-down caused by rising yields.
The findings highlight how the AI investment boom, rising corporate borrowing and higher interest rates are increasingly intersecting, creating potential risks for technology valuations and broader financial markets.
