OECD Reports AI Borrowing Drives Bond Yields to 15-Year Highs

The Organisation for Economic Co-operation and Development (OECD) reported in its September 2026 Interim Economic Outlook, titled "Weathering Successive Shocks," that long-term bond yields have surged to their highest levels in 15 years across most major advanced economies. This increase is attributed to heavy borrowing by artificial intelligence companies, which is putting upward pressure on borrowing costs.

The OECD highlighted concerns regarding longer-term government finances and significant corporate bond issuance by AI firms as key contributors to rising market yields. The report indicates that the term premium, the additional compensation investors require for holding longer-term bonds, is also increasing.

The OECD warned that further increases in long-term sovereign bond yields could result from heightened competition for funding due to strong bond issuance by AI companies. Additionally, the report raised alarms about financial risks stemming from AI companies' financing methods, including rising credit risk and complex financing structures, which could exacerbate the impact of shifts in investor sentiment.