Soaring High-Yield Debt Issuance Reflects Elevated Risk Appetite in Bitcoin Mining and AI Sectors
Companies tied to artificial intelligence and cryptocurrency are securing debt financing with interest rates reaching 9%, significantly exceeding rates paid by conventional utility providers.
High-yield bond markets are becoming an increasingly prominent funding source for the expanding AI and data center sector, which has been partially propelled by Bitcoin mining operations, highlighting how financial institutions are evaluating both the risks and potential rewards inherent in this industry.
The differential in borrowing costs is striking: Whereas traditional energy providers and regulated utilities typically secure financing at rates between 4% and 5%, companies associated with artificial intelligence and cryptocurrency are paying rates in the 7% to 9% range.
Newly issued high-yield debt denominated in US dollars carried an average coupon rate approaching 7.2% by the end of 2025, marking a decline from the 8% to 9% rates observed in 2023, based on data from Janus Henderson Investors referencing BofA Global Research figures as of Nov. 30.
Companies positioned at the upper end of this interest rate range are predominantly digital asset mining operations that have either transitioned into or are transitioning into AI infrastructure development, indicating that accessing capital continues to be relatively costly for this particular group of businesses.
TheEnergyMag highlighted several recent financing rounds, including CoreWeave's offerings at 9.25% and 9% during May and July 2025, Applied Digital's 9.2% issuance in November, TeraWulf's 7.75% offering, and Cipher Mining's dual issuances at 7.125% and 6.125%.
"The message from lenders is clear," TheEnergyMag wrote. "Regulated load and contracted generation still get treated as infrastructure. AI and bitcoin, even when attached to long-term offtake agreements, are still treated as growth credit."
AI infrastructure boom intensifies
Notwithstanding worries regarding excessive capital deployment and the possibility of surplus capacity, the construction and expansion of AI-focused data centers continues to represent one of the most prominent economic trends, serving as a significant catalyst for investment activity on Wall Street.
The magnitude of this forward momentum was made evident on Wednesday following chipmaker Nvidia's announcement of exceptional fourth-quarter financial results, featuring a 94% surge in profit and a 73% increase in revenue compared to the previous year. The semiconductor manufacturer disclosed $43 billion in net income alongside $68.1 billion in revenue.
Concurrently, companies operating in the Bitcoin mining space are developing plans for approximately 30 gigawatts of additional power capacity designated for AI computing applications, representing nearly three times the capacity these firms currently maintain. A substantial portion of this capacity remains within development frameworks or preliminary planning phases, yet the sector has explicitly communicated that AI infrastructure development constitutes a key strategic objective.