Michigan Manufacturing, AI Debt Investments, Baby Bonds, Canadian Coal Fight

Oracle

Across the shows: 7 speakers in other episodes, 0 bullish and 5 bearish calls, past 30 days

• Loren Moran · Wellington ManagementBearish

  Oracle's highly levered balance sheet is priced differently from less-levered Microsoft in credit markets.

  Moran says the market is separating hyperscaler credits by leverage and financial policy. She singles out Oracle as highly levered, and Microsoft as less levered. Investors reward clear, prudent financial policy and certain cash flows. The hyperscaler names move together but with different sensitivities.

  “We are seeing the market differentiate between more levered balance sheets, highly levered balance sheets like an Oracle versus less levered balance sheets like a Microsoft.”at 20:55

AI infrastructure & data centers

• Jamie Dimon · JPMorgan Chase

  Raising capital for AI is productive and good, but not all of that investment will pay off.

  Dimon says it is good when companies raise capital for productive future growth, which he believes AI spending is. He qualifies this immediately: investors raising money on the expectation of payoff does not mean every AI project will pay out. He also says that such capital need not cost more.

  “If people are raising productive capital because they think it's gonna pay out in all various ways, I think that's a good thing. Doesn't mean it's all gonna pay.”at 11:32

• Loren Moran · Wellington Management

  Hyperscaler borrowing is driving IG issuance growth, and buyers now demand more yield to lend.

  Moran says hyperscaler borrowing began in 2025 and is running near $300 billion in investment-grade borrowings in 2026. Hyperscalers are now the main source of growth in US investment-grade issuance, which is up about 35% year over year. The first deals drew huge demand, but each new deal now needs more compensation as the issuers take up a bigger share of the market. Sovereign and M&A demand for capital adds to the strain.

  “When we look back to 2025, where really this borrowing from hyper calers had really only begun. Through the course of 2026, we're probably looking at around 300,000,000,000 in the investment grade market borrowings from [hyperscalers] themselves.”at 15:10

• Loren Moran · Wellington Management

  Data center debt carries construction, permitting and electrification risks new to investment-grade investors.

  Moran says hyperscalers can be attractive bond issuers, but data center financing has a much different risk profile from typical investment-grade debt. The risks are construction, permitting and electrification. Special-purpose vehicles and off-balance-sheet structures, including GPU and chip financing, shift this risk onto a bond market that is new to it.

  “whereas data centers are a little bit different. And I think the nuance there is data center financing bears much different risk profiles than we typically have in the investment grade market. You have construction risk. You have permitting risk. You have electrification risk.”at 19:04

• Scott Schulte · Barclays

  Data center projects face execution risk on power, transmission, cooling and build timelines.

  Schulte says there have been force majeure claims, at least implied, in a couple of recent cases. He says the AI ecosystem has to be viewed as a whole. Projects depend on getting power, transmission and heating and cooling, and on building on schedule. Where a project is late, the hyperscaler's contractual outs matter for the lenders.

  “You've seen in recent days there's been force majeure, at least implied in a couple instances. ... Can I get the power? Can I get the transmission... Can I get the thing built in two years when it's supposed to be built?”at 19:44

• Subadra Rajappa · Societe Generale

  Riskier hyperscaler debt is still attractive on all-in yield despite some high-yield AI names under pressure.

  Rajappa says some riskier hyperscaler names trade at a significant discount, and investors are becoming more discerning. Some high-yield names have widened in recent weeks. Still, spreads are relatively healthy, and all-in yields remain attractive for some of these names. Her view is that investors have a market for riskier hyperscaler debt if the price is right, though AI supply is being well absorbed so far.

  “The general level of yields have gone up quite substantially, and corporate bond spreads are still relatively healthy. So for the investor, it's a question of all in yield, and the all in yield is still quite attractive in some of these names.”at 21:42

Credit markets

• Scott Schulte · Barclays

  Hyperscalers' share of the investment-grade index has jumped and is extending the index's duration.

  Schulte says the big five hyperscalers were about 1-2% of the investment-grade index two or three years ago and are now about 5%. Although they are still 95% of the rest of the index, they are becoming leading components. Banks used to top the index because they issue shorter debt. Hyperscalers prefer very long debt, sometimes 20, 30, 40 or even 100 years, which is extending the index's duration meaningfully.

  “Right now, the big five hyperscalers are about 5% of the index. But again, go back two or three years, that was one to 2%.”at 17:36

• Loren Moran · Wellington Management

  AI hyperscaler debt will overtake US money-center banks as the top bond-market concentration risk.

  Moran compares the post-GFC concentration in money-center banks, which was the largest concentration risk in the market. She expects the AI hyperscaler trade to overtake that concentration within the next year and a half or two years. She sees this as a new risk, because the debt is spread across issuers whose borrowing is rising quickly.

  “the AI hyperscaler trade will easily overtake The US money center banks in terms of concentration over the course of the next, you know, year and a half or two years.”at 18:21

• Subadra Rajappa · Societe Generale

  Government bond issuance across developed markets is crowding out the corporate bond market.

  Rajappa says the issue is the scale of debt and deficits across developed markets, not just the US. She cites Japan and the UK, Germany issuing more for defence and infrastructure, and widening spreads in France. Government bonds used to be a steady source of demand. Now investors can choose between government bonds and corporate bonds at higher yields, so government issuance is crowding out the broader bond market.

  “broadly speaking, my perspective is that government bonds are starting to crowd out the larger, bond market complex.”at 24:42

Manufacturing & industrial policy

• Jim Farley · Ford Motor Company

  US must onshore offshored supply chains such as magnets and rare earths to be independent and defend itself.

  Farley argues that US manufacturers offshored key inputs for small cost savings, leaving the country dependent on foreign supply. He cites magnets and rare earths bought overseas. Ford will commit $1 billion of purchasing to new US companies building advanced manufacturing capabilities, with JPMorgan and Michigan support, to bring that supply home. He frames onshoring as necessary for national independence and defence.

  “We're trying to fix a problem, onshoring things that were offshored in the name of pennies on the dollar to make here in The US where we needed to be independent, even defend ourselves.”at 2:17

• Gretchen Whitmer · State of Michigan

  Michigan has the talent and engineering base to lead advanced manufacturing and homeland security.

  Whitmer argues Michigan is built for manufacturing and was the arsenal of democracy, so the program is about homeland security and advanced manufacturing. She cites the country's highest concentration of engineers per capita as evidence. She says the state needs to connect innovators with capital and customers, which is the role she sees for government.

  “we've got the highest concentration of engineers per capita in the country as well here in Michigan.”at 7:46

US deficit & government debt

• Jamie Dimon · JPMorgan Chase

  Record government borrowing is crowding out private capital and is inflationary, including in the US.

  Asked whether AI demand for capital is crowding out others, Dimon says the crowding out comes from government. Governments worldwide are borrowing record sums, and he calls this inflationary, including for the US, where he says the government borrowing is huge. He treats this government borrowing, not private AI financing, as the main source of crowding out.

  “the crowding out is coming from the government. So governments around the world are borrowing record sums of money, which is inflationary, by the way, including our government, which is huge.”at 11:16

Tariffs & trade policy

• Heather Exner-Pirot · Macdonald-Laurier Institute

  Metallurgical coal could help Canada diversify trade partners beyond the US.

  Exner-Pirot argues that Canada is trying to diversify its trade alliances and be more relevant to other countries. She says metallurgical coal could be a strong tool for this. She notes that Europe, the US and India classify it as a critical mineral, so resource exports can become a tool of soft power and alliance-building. She also says mining is now high on the agenda and public opinion has become more positive since Trump was elected.

  “When we talk about diversifying trade alliances, when we talk about being more relevant to different countries, I think metallurgical coal could provide a great opportunity for that.”at 45:03