$33B in Bonds Is Fueling the AI Megawatt Arms Race
From 4% utility paper to 9% AI debt, the bond market is underwriting the data center supercycle
If you want to understand the AI and data center boom in 2026, don’t just look at GPUs, megawatts, or backlog announcements.
Look at the bond market.
Over the past 12 months, more than $33 billion of long-term senior notes have been issued by just a short list of bitcoin mining/AI infrastructure companies, utilities and power producers — and that’s excluding convertible notes. This isn’t equity dilution. It’s hard debt: Fixed coupons; Real maturities; Real interest expense.
And the spread between who pays 4% and who pays 9% tells you almost everything about how the market is underwriting the data center arms race.
The 9% Club: AI and Bitcoin Infrastructure
At the high-yield end of the spectrum, the capital isn’t cheap.
CoreWeave printed:
$2.0B at 9.25% (May 2025)
$1.75B at 9.00% (July 2025)
Applied Digital:
$2.35B at 9.25% (Nov 2025)
TeraWulf:
$3.2B at 7.75% (Oct 2025)
Cipher Mining:
$1.4B at 7.125% (Nov 2025)
$2.0B at 6.125% (Feb 2026)
Cipher’s February deal is interesting. In just three months, its pricing improved by a full percentage point even as it doubled down with a $2 billion issuance. That suggests there’s still appetite for “compute-backed” credit, especially when colocation leases and power contracts are in place.
But zoom out and compare this to regulated utilities and power producers.
The 4–5% World: Incumbent Energy Giants
Now look at the other side of the ledger.
Dominion Energy:
Multiple tranches between 4.6% and 5.65%
NRG Energy:
Mostly 4.7%–6.0%
Vistra Corp.:
January 2026: $2.25B at 4.70% and 5.35%
The Southern Company:
Several issuances clustered around 4%–5.5%
Constellation Energy:
$2.75B in January 2026, multi-tranche, largely sub-5% depending on maturity
Same macro environment. Same Treasury curve. Different credit pricing.
The message from lenders is clear: regulated load and contracted generation still get treated as infrastructure. AI and bitcoin, even when attached to long-term offtake agreements, are still treated as growth credit.
The Spread Story is a Credit-Rating Story
If you line these issuers up by coupon, you get a rough risk ladder:
4%–5%: Regulated utilities and diversified power producers
5%–6%: Stronger independent generators
6%–9%: Bitcoin miners and AI infrastructure builders
Regulated utilities and established power producers tend to sit in the investment-grade universe, with long operating histories, predictable (often regulated) cash flows, and deep institutional demand for their paper.
On the other side, the newer “compute” names — especially the ones still scaling, still building, or still proving the durability of their customer base — are typically borrowing as high-yield / speculative-grade credits. Even when they have real contracts, the market still prices in execution risk, refinancing risk, and the reality that capex eats cash before it creates cash.
Why So Much Debt, So Fast?
The common thread isn’t crypto cycles. It’s data center demand.
Utilities are openly revising capital plans upward. Southern now expects a $78.1 billion investment plan through 2030, with $15.9 billion in 2026 alone — explicitly citing projected load growth from data centers. Dominion similarly flagged billions in anticipated long-term debt issuance (between $6B and $9.5B in 2026) to support infrastructure expansion driven by large new data center customers.
On the AI side, the logic is simpler: secure power first, figure out monetization later.
For miners transitioning into HPC, the debt stack is becoming the bridge between legacy bitcoin cash flows and future AI tenancy – assuming there’s still cash flow from bitcoin mining. For AI players like CoreWeave, it’s about scaling ahead of revenue realization under hyperscaler contracts.
Is This a Bubble — or Just a Capex Supercycle?
There’s a bigger question hanging over all of this.
If AI demand holds, these coupons may look entirely rational. Debt gets refinanced lower. Assets appreciate. Power scarcity becomes the bottleneck.
But if AI demand cools — or hyperscaler buildouts lose momentum — the 7%–9% debt stack tied to merchant-exposed compute assets could become burdensome fast, particularly with bitcoin mining economics providing little buffer.
Remember: most of these maturities cluster around 2030–2036. That’s not far away in infrastructure time. This isn’t just a power story anymore. It’s a balance sheet story.
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