According to a report from Zhitong Finance APP, Rick Rieder, BlackRock's (BLK.US) Global Chief Investment Officer of Fixed Income, stated that the AI-driven debt boom is creating the most attractive fixed income investment opportunities in years, even surpassing long-term US Treasuries in appeal. "I've never seen anything like the scale of financing flowing into both the bond and equity markets," said Rieder, BlackRock's Global CIO of Fixed Income, in an interview. "I've spent most of my career waiting for 7% yields."
Rieder pointed out that the surge in financing around GPUs, data centers, and other AI infrastructure is particularly appealing. He favors secured debt from established companies and cash flow-generating assets, and also believes that equity valuations in the semiconductor and computing sectors are at reasonable levels.
The AI industry is undergoing a massive capital expenditure cycle, with hyperscale cloud providers potentially spending up to $1 trillion annually on the technology, which is expected to reshape the global economy. This expansion has pushed global high-grade AI-related financing past $300 billion in 2026, roughly three times the total for all of 2025.
"This is one of the most exciting investment periods I've ever seen. I spent the entire weekend studying some of these deals and participated in some of them in a fairly significant way," Rieder said. He noted that the sheer volume of new debt issuance has improved pricing compared to the past, offering investors more attractive entry points.
Compared to the largest high-grade bond issuance in the US this year, 10-year US Treasuries have "taken a back seat" among fixed income opportunities. Even with yields above 5%, Rieder increasingly views them less as a core investment and more as a market barometer — often used to gauge stock market movements. He said investors can instead achieve yields of around 7% in short-duration, single-A rated portfolios while avoiding the duration risk associated with long-term government bonds.
Outside the US, Rieder sees opportunities in long-end Japanese rates and attractive yields in emerging markets, though he warned that political events, including Brazil's elections, warrant caution. He remains cautious on French bonds, expecting continued volatility, and has limited exposure to RMB-denominated bonds due to their "lack of appeal relative to other opportunities."
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