Hyperscaler bond basket: another day, another record wide
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How is that possible? The 30-Year Treasury yield has moved from an all-time low of 0.8% in March 2020 up to 5.3% today. Long duration + Rising interest rates from all-time low levels = Pain Source: Charlie Bilello
Source: Trend Spider
The main reason? Chinese AI models are dramatically cheaper. DeepSeek, Qwen and Kimi are delivering increasingly competitive performance at 10–35x lower token prices than many U.S. alternatives — and already account for as much as 46% of usage in some enterprise segments. The pressure is spreading. OpenAI, Google and Anthropic have responded by cutting prices by as much as 80%. This creates an interesting dynamic: Cheaper inference → more AI adoption → more token consumption → more demand for compute. But at the same time, it is compressing margins and commoditizing the intelligence layer. The likely long-term winners could therefore be the hyperscalers and infrastructure providers: even if the price per token collapses, exploding volumes can more than compensate. AI intelligence may become a commodity. AI compute may not. And markets still seem far from fully pricing that shift. Source: Austral Research, zerohedge

