TREE NEWS reports: Federated Hermes chief investment officer Debbie Cunningham said borrowing by AI companies may actually create demand for U.S. Treasuries, as hyperscalers including Alphabet, Microsoft and Meta park unused cash in money market funds that invest in government debt. Cunningham, who oversees the firm’s $677 billion money market funds, said demand for Treasuries will hold even as more lenders target AI companies, since fund mandates and collateral rules require investors to hold U.S. government bonds.
Federated Hermes CIO: Big Tech AI Debt Sales Don’t Crowd Out Treasuries
AI take
The pushback matters because it reframes AI infrastructure borrowing as a liquidity event rather than pure supply competition for government debt. Money market mandates and collateral rules are the structural reason: hyperscaler cash does not simply sit idle, and the funds that hold it are bound to Treasuries regardless of how much AI-related issuance arrives. The open question is whether that parking behavior persists as AI capital spending scales, and whether the lending surge Cunningham acknowledges actually leaves Treasury demand intact.
Generated by AI for reference only.
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