Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton.

It's a global debt emergency on the horizon. Big Tech's bond issuing spree is helping to pay for its massive artificial intelligence

buildout, and it's not expected to slow down this year. Meanwhile, the U.S. federal deficit has

swelled to about $39 trillion, according to the U.S. Treasury Department, and that's raising red flags about the potential impact

on the Treasury's market. Government and corporate debt are growing, but for different reasons.

How should investors think about it? Dominic Popolardo is the chief multi-asset strategist for

Morningstar wealth. It's part of Register Investment Advisor,

Morningstar Investment Management. Thanks for being here, Dom.

Great to be here, Ivanga. Thanks for having me back.

Now, Big Tech is issuing hundreds of billions of dollars of bonds to spend on building

data centers and other AI infrastructure. Can you talk

about the biggest deals? So earlier this year, Oracle issued at the time what was the largest bond

deal, corporate bond deal in history of the U.S. That's basically making a massive bet that these

AI investments will pay off. Other companies have followed suit.

There's really four or five very large issuers that are participating in this dynamic that you

described. It's risky, especially because these companies that are doing it, the tech leaders,

traditionally didn't have to issue debt. They generate a lot of free cash flow because they're

very profitable and they've been able to use that excess cash to reinvest into the business or

they needed. This is a bit of a change of direction for them because they're now very clearly

levering up to make those investments as opposed to just using the cash that they had on hand like

they've done previously.

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