Bond investors grow wary of AI-linked debt as Democrats prepare to take over Congress
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A Reuters analysis says bond investors are more cautious on AI-boom debt, citing expected Democratic efforts in Congress to slow AI investment and data center expansion. One data center bond fell to 89.25 cents on the dollar.
A Reuters analysis dated November 10, 2026 reports that bond investors are growing more cautious about debt tied to the artificial intelligence boom. It points to expected efforts by a Democrat-controlled Congress, which takes over in January, to slow the pace of AI investment and data center expansion. Democrats are said to be planning new legislation targeting AI systems and data center development. President Donald Trump has repeatedly dismissed calls for mandatory AI rules, but after his party's midterm loss he signaled openness to safeguards.
US high-yield credit spreads widened to 348 basis points last Thursday, the highest since May 2025, then narrowed to 342 on Friday. Single-B spreads widened 35 basis points to 367, the highest since March. Galaxy Helios Data Center bonds fell to 89.25 cents on the dollar on November 5, lifting their yield to 13% from 9.875% when they were sold in late July.
Some investors say a slowdown could help the credit market, since stricter rules would mean less bond issuance. Capital Group's Karen Choi said political and regulatory uncertainty could affect 2028 to 2030 and later, but is unlikely to significantly change 2027 spending and issuance because many projects are already under way. Ben Emons of FedWatch Advisors said AI is not going to slow down and that if it slows in Texas, it will pop up in another state.
