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BlackRock: AI Infrastructure and Government Borrowing Drive Up Capital Costs
Finance · Investment Managers · economic_daily · 2026-09-23
BlackRock warns that surging AI infrastructure investment and heavy government borrowing are intensifying capital competition, keeping borrowing costs elevated.
What Happened
Intensifying Capital Competition: BlackRock highlights that accelerating AI infrastructure development and massive government borrowing needs have created the most intense capital competition since the financial crisis and the pandemic. The firm estimates that U.S. annual financing requirements could exceed $7.5 trillion by 2030, largely driven by AI-related capital expenditures.
Corporate Resilience: Despite the high-interest-rate environment, BlackRock maintains an overweight position on U.S. equities and AI, noting that companies with strong balance sheets and robust profitability can better absorb higher borrowing costs. Conversely, highly leveraged borrowers are expected to face significant financial pressure as credit conditions tighten.
Fixed Income Strategy: In the bond market, BlackRock favors short-to-medium-term government bonds and advocates for a highly selective approach to credit. Investors are encouraged to seek attractive coupons while avoiding the weakest borrowers and those with excessive debt issuance, as high yields offer opportunities but require careful risk management.
Economic Outlook: The firm is closely monitoring upcoming PMI data and the University of Michigan consumer sentiment index to gauge the resilience of business activity and inflation expectations. If the U.S. economy remains strong while inflation expectations rise, it could reinforce the case for the Federal Reserve to keep interest rates higher for longer.