AI Debt Explosion: Magnificent Seven Borrowing Hits USD 578 Billion
SBI Research reveals a 45% jump in debt for the Magnificent Seven tech giants as AI infrastructure costs soar.
The relentless race for artificial intelligence supremacy is coming with a staggering price tag. According to a recent report by SBI Research, the combined debt of the "Magnificent Seven"—the seven largest US technology titans—has surged by nearly 45 per cent, reaching a massive USD 578 billion by mid-2026.
This sharp increase highlights the immense financial pressure these companies are facing as they scramble to build out the infrastructure required to sustain the AI revolution. The group, which includes Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, saw its collective debt climb from approximately USD 399 billion in 2025. To put this growth in perspective, their current borrowing is nearly 1.7 times what it was in 2023.
The Hidden Costs of the AI Boom
While the headline debt figure is eye-watering, SBI Research warns that the full financial picture is even more complex. The report flags substantial "off-balance-sheet commitments," which include obligations tied to strategic investments and massive hardware purchases necessary for AI expansion.
The concern is that this aggressive borrowing is happening at a precarious time. With rising Treasury yields and higher borrowing costs, these companies could face significant valuation pressure. The report explains that an increase in the discount rate applied to future earnings could lead to a serious correction in market value.
Potential Market Cap Crash
Using an equity duration approach, the analysis suggests a sobering possibility: a rise in yields could wipe out between USD 1.67 trillion and USD 2 trillion from the combined market capitalization of these seven firms. This is a significant risk considering their combined market value is estimated at roughly USD 23 trillion.
Anthropic: The Ultimate AI Litmus Test
As the industry holds its breath, all eyes are turning toward the potential public entry of Anthropic. Expected to enter the public equity markets around November 12, Anthropic is targeting a valuation between USD 1.5 trillion and USD 2 trillion.
SBI Research describes this upcoming listing as a "high-stakes litmus test" for the entire AI sector. It will provide a critical moment for public investors to determine if the actual revenues generated by AI enterprises can truly justify the astronomical costs of computing and infrastructure.
Broader Economic Ripples: The Federal Reserve
The impact of rising bond yields isn't limited to tech giants. The report also sheds light on the US Federal Reserve's struggle with its government securities holdings. Unrealized losses on Treasury holdings grew by USD 26.3 billion, jumping from USD 535.3 billion in December 2025 to USD 561.5 billion by June 2026.
This decline is linked to the US 10-year Treasury yield, which climbed from 4.18 per cent to 4.44 per cent during that period. While the Federal Reserve's total assets have decreased, the report clarifies that this is primarily due to securities runoff under its quantitative tightening programme, rather than a direct automatic write-down caused by the yields.