A $14 Billion Bond Manager Is Refusing To Fund The AI Buildout

On September 21, 2026, Bloomberg reported that Fidelity International's James Durance does not want AI bonds. The London-based portfolio manager, who oversees $14 billion in assets, has kept tech exposure across his income strategies below 2% as hyperscalers flood the market with debt to fund the artificial intelligence boom.

His concern is not creditworthiness. Durance says that by the end of next year, lending to the sector could grow so large that its size becomes a risk in itself.

That is a different objection than the usual one. The worry is not that Amazon or Microsoft will miss a payment. It is that AI-related debt becomes such a large share of the corporate bond market that investors end up concentrated in one theme whether they intended to be or not.

The position has held through a period of rising issuance. Alphabet and Amazon have ramped up borrowing to fund AI initiatives, contributing to higher long-term yields, and Durance remains skeptical of current price levels.

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Fidelity International manages money for institutions and individuals, and Durance's income strategies buy corporate credit, meaning his job is deciding which companies to lend to and at what price.

The stance is not a one-person view. In its midyear outlook published in June, Fidelity told clients it was steering core bond portfolios away from the wave of new debt that Amazon, Alphabet, Meta, Microsoft, and Oracle are selling to pay for data centers, chips, and power. As one of its total bond fund co-managers put it then, investors are not well compensated to own corporate securities right now.

The supply figures explain the caution. Those five companies sold roughly $121 billion of U.S. corporate bonds in 2025, more than four times their average of about $28 billion a year between 2020 and 2024, and Oracle alone sold $18 billion of bonds in September.

The mechanics are about compensation, not solvency. These borrowers carry high credit ratings, so their bonds trade at only a small yield premium over government debt, which means lenders collect very little extra for funding an unproven buildout.

Concentration is the structural problem. As AI-related issuance swells, index-tracking bond portfolios absorb more of it automatically, so investors gain exposure to a single theme without ever choosing it.

The shift in venue is the real story. AI spending was an equity story for three years, and the move to debt markets means the buildout is now being financed by lenders who get no upside if it works, only losses if it does not.

Staying under 2% has a cost. If AI demand holds and these bonds perform, Durance underperforms peers who bought them, and large technology borrowers remain among the most creditworthy issuers in the market.

The timing is also unknowable. Investors have warned about stretched credit spreads before and been early by years, and the concern here is about market structure rather than a specific catalyst. Meanwhile other managers are moving the opposite way, with rival funds targeting AI supply-chain exposure, so this is a disagreement among professionals rather than a consensus warning.

The stance matters because it shows where scrutiny of the AI buildout is now concentrated: among the lenders funding it rather than the shareholders betting on it. The real impact depends on whether credit markets keep absorbing hundreds of billions in issuance at current prices, and what happens to the buildout if they stop.

Disclosure: This content is for educational and informational purposes only and does not constitute investment advice or recommendations. You should always conduct your own research or consult a qualified financial advisor before making investment decisions.