> I have argued the AI boom has many of the hallmarks of a bubble but will keep inflating until interest rates get to prohibitive levels. My research now suggests the marker to watch is the yield on 10-year US Treasury bonds, the global benchmark for long-term borrowing costs, which is now at 4.8 per cent. When it decisively breaches 5 per cent, the upper end of its range since the dotcom period, the AI bubble could pop.

> This breach would signal the start of a new era of tighter money, in which AI mega projects will be harder to fund. When Big Tech must compete for capital with a government paying a yield of more than 5 per cent on bonds — which matches an inflation expectations-adjusted return of over 2.5 per cent — many will find themselves crowded out of the debt markets, with serious consequences.

So the longevity of the AI bubble depends on the speed at which demand for US Treasuries declines, pushing up yields.

Foreign treasuries investors have the opportunity to do something hilarious: sell off their US treasuries, end the AI capital bubble and deflate US big tech valuations.

Norway's Oil Fund Proposes Selling Roughly $80B in US Treasuries - https://news.ycombinator.com/item?id=49564189 - September 2026

Gold replaces US Treasuries as top reserve asset, ECB says - https://news.ycombinator.com/item?id=48375237 - June 2026

Gold overtakes US Treasuries as the largest foreign reserve asset - https://news.ycombinator.com/item?id=47635056 - April 2026

US Treasuries and other government bonds will keep selling off, BlackRock says - https://news.ycombinator.com/item?id=47418483 - April 2026

China Urges Banks to Curb Exposure to US Treasuries - https://news.ycombinator.com/item?id=46942467 - February 2026

Danish pension fund divesting US Treasuries - https://news.ycombinator.com/item?id=46692594 - February 2026