The article discusses how the growing demand for money from AI companies is affecting the bond market, making it more chaotic. Bond yields, which indicate the return on bonds, have risen to their highest levels in decades, especially in the US, UK, and Japan, where governments are running large budget deficits. AI companies are borrowing a lot of money to support their operations, such as building data centers and acquiring technology. This competition for funds means that both AI firms and governments are trying to attract the same investors, which include pensions and insurance companies. As a result, AI bonds are becoming very appealing to investors, sometimes even more than government bonds. This shift is causing government bond yields to rise, which can lead to higher costs for loans, mortgages, and other borrowing for individuals and businesses. In summary, the race to invest in AI is changing the bond market, leading to higher borrowing costs for everyone.
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