In Forbes, Columbia Business School Professor Stijn Van Nieuwerburgh looks at the surge in high-yield debt behind the AI data center buildout. So far in 2026, data center developers and AI cloud providers known as "neoclouds" have raised $80 billion in data center bonds. Of that, $37 billion, nearly half, is rated junk, more than four times the 2025 total. A Forbes analysis of FactSet data found these bonds finance 16 data center projects leased to or backed by companies such as Amazon, Meta, Nvidia, Oracle, and Jane Street, along with fast-growing neoclouds like CoreWeave and Fluidstack. Investors are now pulling back. Average yields on these bonds climbed to nearly 10% in a single week, and about $4 billion of CoreWeave's corporate debt is trading below 80 cents on the dollar. "Bond investors don't benefit from the upside. They only worry about the downside," Van Nieuwerburgh says. "The yields are beginning to reflect an increased probability of a downside scenario." Equity markets are showing the same strain, as heavily indebted developers Firmus, SB Energy, and AirTrunk have postponed or canceled their IPOs.
