The Magnificent Seven tech firms face rising financial pressure as their combined debt hits USD 578 billion, sparked by massive spending on AI infrastructure and potential risks from fluctuating US Treasury yields and market valuations.
Surge in Debt Among Leading US Tech Giants
New Delhi [India], November 2 (ANI): The combined debt of the seven largest US technology companies, widely known as the Magnificent Seven, has increased nearly 45 per cent to USD 578 billion by mid-2026, raising concerns over the financial risks linked to the rapid expansion of artificial intelligence infrastructure, according to a report by SBI Research. The Magnificent Seven comprises Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
The report said their combined debt, which stood at around USD 399 billion in 2025, is now nearly 1.7 times its 2023 level. It also flagged substantial off-balance-sheet commitments, including obligations related to purchases and investments, as companies continue to expand their AI infrastructure.
Market Valuation Risks and Future Outlook
“Higher borrowing costs and rising Treasury yields could put pressure on their valuations by increasing the discount rate applied to future earnings,” the report cautioned. Using an equity duration approach, the report estimated that a rise in yields could result in a potential market capitalisation decline of around USD 1.67-2 trillion for the seven companies, whose combined market value was estimated at approximately USD 23 trillion.
Anthropic Listing as a Litmus Test
The report also pointed to the expected entry of Anthropic into public equity markets, likely around November 12, with a target valuation of USD 1.5-2 trillion. It described the proposed listing as a “high-stakes litmus test” for the financial viability of the AI boom, allowing public investors to assess whether rising enterprise revenues can justify the substantial infrastructure and computing costs involved.
Impact on Federal Reserve Holdings
Beyond technology companies, SBI Research highlighted the impact of rising bond yields on the US Federal Reserve’s holdings of government securities. Its unrealised losses on Treasury holdings increased by USD 26.3 billion, from USD 535.3 billion in December 2025 to USD 561.5 billion in June 2026. During the same period, the US 10-year Treasury yield rose from 4.18 per cent to 4.44 per cent.
“Higher yields reduce existing bond prices, lowering the market value of Treasury securities held by the Fed and increasing unrealized Higher yields reduce existing bond prices, lowering the market value of Treasury securities held by the Fed and increasing unrealized losses,” the report said. It clarified that the decline in the Federal Reserve’s total assets largely reflected securities runoff under its quantitative tightening programme, rather than an automatic write-down caused by rising yields. (ANI)
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