'Magnificent Seven' debt jumps 45% to $578 billion: SBI Research flags AI boom risks

Mumbai: The combined debt of the seven largest US technology companies, known as the “Magnificent Seven,” has risen nearly 45 per cent to $578 billion by mid-2026, according to an SBI Research report that warns of mounting financial risks tied to the rapid build-out of artificial intelligence infrastructure.

The group -- Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla -- had a combined debt of about USD 399 billion in 2025. The report said the current level is nearly 1.7 times the companies’ 2023 debt stock.

SBI Research also flagged substantial off-balance-sheet commitments, including purchase and investment obligations, as technology firms continue spending heavily on AI-related data centres, chips and computing capacity.

“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 framework, the report estimated that a rise in yields could trigger a potential market-capitalisation decline of USD 1.67–2 trillion for the seven companies. Their combined market value was estimated at about USD 23 trillion.

Anthropic listing in focus

The report also pointed to the expected public-market debut of AI firm Anthropic, likely around November 12, at a target valuation of $1.5–2 trillion.

It described the proposed listing as a “high-stakes litmus test” for the financial sustainability of the AI boom, giving public investors an opportunity to judge whether rising enterprise revenues can justify the enormous infrastructure and computing costs behind the sector’s expansion.

Beyond Big Tech, the report highlighted the impact of higher bond yields on the US Federal Reserve’s holdings of government securities. The Fed’s 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 unrealised 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.