Normally staid bond investors have a new biggest worry: An AI bubble

In this articleFears over artificial intelligence are now hitting bond investors, according to the latest credit investors survey from Bank of America Global Research.An AI bubble is seen as the top risk for the first time, with investors expecting a surge in bond issuance from hyperscalers, the February poll found. Some 23% of those surveyed said it was their biggest concern, compared to 9% who said so in the firm's December poll. Companies including Amazon, Google parent Alphabet and Meta have announced big spending plans as they scale out their AI capabilities. Investors of high-grade credit now expect $285 billion in issuance by hyperscalers this year, up from the $210 billion anticipated in December's survey, Barnaby Martin, credit strategist at Bank of America, said in a note Tuesday. "Yet, investors are more sanguine on the ultimate tech disruption ahead: just 10% say that AI-driven corporate obsolescence is their big worry," he wrote. Those obsolescence fears have hit the stock market in recent weeks, as concern over AI disruption spread across a variety of sectors. Software companies, for instance, have tumbled after announcements from AI company Anthropic about new AI tools. While stocks have reversed course since the latest sell off on Tuesday, the iShares Expanded Tech-Software Sector ETF is still down more than 25% year to date. Elsewhere, geopolitics isn't a big factor on bond investors' radar these days, with only 10% saying it is their top fear, despite growing tensions between the U.S. and Iran, Martin noted. No investor said central bank policy error is the big risk, even with a new Federal Reserve chair expected to take the helm in May.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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