JPMorgan Asset Management warned on August 18 that AI-related concentration risk has spread from equity portfolios to bond markets. Companies building AI infrastructure are raising capital by issuing bonds, driving investment-grade corporate bond issuance to record levels for four consecutive months. Hyperscalers like Alphabet are key drivers of this wave, tapping bond markets to fund data centers and physical infrastructure. Gabriela Santos, Chief Market Strategist for the Americas at JPMorgan Asset Management, recommends diversifying portfolios with assets uncorrelated to AI themes, such as Treasuries, gold, and core real estate. JPMorgan notes that tightening credit spreads on AI-adjacent bonds may mask underlying credit risk.
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