AI-driven borrowing pushes global bond yields to 15-year high

The OECD's September 2026 Interim Economic Outlook says long-term sovereign bond yields in most major advanced economies are at their highest level in 15 years or more. It points to worries about longer-term government finances and a surge in corporate bond issuance by artificial-intelligence firms as the main drivers of the rise. The extra return investors demand to hold longer-term bonds - the term premium - has also gone up. Higher yields increase borrowing costs for governments worldwide, putting pressure on public finances and raising the cost of external debt for countries like Nigeria. If AI-related earnings fail to meet expectations, a shift in investor sentiment could trigger sharp market moves, affecting global liquidity and the appetite for risk-ier assets, including those in emerging markets. The OECD warns that AI companies are increasingly using leverage and complex financing structures, which could amplify any downturn. Analyst forecasts show AI-related firms need rapid earnings growth over the next few years to justify current valuations; disappointing growth could slow investment in the sector and spill over into engineering, construction and related industries. Major tech players are already tapping debt markets: Oracle plans to raise $45-$50 billion through a mix of debt and equity to expand its cloud infrastructure, part of it via bond issuance, while SpaceX has turned to the bond market to secure $25 billion for AI-focused investments. Should Nigerian businesses and investors factor in higher global borrowing costs when planning expansion or offshore financing, or look more to local funding sources and hedging strategies to mitigate the impact?

SOURCE: https://nairametrics.com/2026/09/25/ai-borrowing-pushes-long-term-bond-yields-to-15-year-highs/