Marketplace - AI corporate bonds are booming

Episode Date: June 16, 2026

Nvidia just joined the likes of Amazon and Alphabet in selling off billions of dollars in bonds. What do these tech giants need help financing? Data centers, of course, to support the buildout of artificial intelligence infrastructure. For now, the cash is flowing, but when will these firms need to show some returns on those investments? Also in this episode: Commercial solar energy projects approach a deadline for federal tax credits, Fox enters the streaming wars by acquiring Roku, and Kai breaks down the history of post-FOMC press conferences.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

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I wonder what Kevin Warsh is going to say tomorrow. From American Public Media. This is Marketplace. In Los Angeles, I'm Kai Rizdahl. It is Tuesday. Today, this one is the 16th of June. Good as it always is to have you along, everybody. Kevin Warsh coming up in a minute,

but we begin today with a somewhat but not really a hypothetical question. Is there such a. a thing as having too much money. It's relevant on an individual level as the world tries to decide how it feels about its first trillionaire. But it's also relevant on the corporate level because really big companies sitting on really big piles of cash are going to the capital markets to get more. Alphabet issued $85 billion worth of new shares last month.

Amazon and Alphabet as well have gone to the bond market to raise billions in the past couple of months. NVIDIA did the same thing yesterday. The raising cash part isn't unusual. It's the, they've already got so much of it. That's the news. Marketplaces Henry Ep gets us going. This is really all about data centers.

Big Tech, as you know, is all in on artificial intelligence, which takes a massive amount of computing power to run. So they're building out that infrastructure, which is costing them collectively hundreds of billions of dollars just this year. Julie Osk is a tech analyst and founder of Osk advisory. This is an unprecedented level of capital expenditure for most of these companies. And the cash they have on hand is not enough. So that's why they're going to the bond and equity markets, says Brent Phil, managing director of tech research at Jeffries.

You can't fund this by just straight equity or straight debt. You need a collection of financing vehicles to fund this AI boom. For big tech, this is a good time. to get that financing because investors have money to put to work and they still want a piece of the AI boom. Invidia's bond sale this week, for example, attracted orders three times greater than the bonds on offer, according to Bloomberg. Sarah Kuhn's head of Cleo Capital says that kind of demand makes borrowing inexpensive. What the CFO's office will be telling the CEO's office is, look, this money is incredibly cheap compared to the normal cost of money, and we should probably

go get some. Before investors change their minds, says Dan Ives, head of tech research at Wedbush Securities. We're in the window where capital is there. Six months from now, that capital might be narrowed. Because as the AI boom goes on, investors will want to see companies actually make a return on all this data center investment, says Brent Thiel at Jeffries. And this is what's concerning investors, is when you look at the type of spend, are we going to get the ROI? The answer, Phil says, might not be clear for a few more years. And he thinks this AI hype cycle might also have years to go. To put it in terms of the internet boom a generation ago...

It feels more like mid-90s at this point. And the dot-com bubble didn't start to burst until 2000. I'm Henry App for Marketplace. Wall Street today, tech not so good, most of the rest, kind of a wash. We will have the details when we do the numbers. This is Fed Week for those who have been. observe, and since 2011, this has been its identifying audio. Good afternoon. The Federal Open Market Committee concluded a two-day meeting earlier today.

Today, the Federal Open Market Committee decided to raise the target range for the federal funds rate. We at the Fed. We'll do everything we can to achieve our maximum employment and price stability goals. Thank you. I look forward to your questions. Press conferences from the chair, Bernanke, Yellen, and Powell in that order. Kevin Warsh, the new guy, hasn't committed to doing one after every meeting. But seeing as tomorrow is going to be his first, we thought a little history might be in order. I would start the story way back in 1994 when the FMC decided to publish statements after their scheduled meetings. That's Tom Larritz at the NYU Stern School of Business.

Alan Greenspan, you might remember, was the chair back in 1994. I just pulled up a random statement. April 18, 1994. Chairman Greenspan announced today that the Federal Reserve will increase slightly the degree of pressure on reserve positions. This action is expected to be associated with a small increase in short-term money market interest rates. End of statement. Which, that's not much to go on, right? But it was more or less the norm until the financial crisis in 2008.

Ben Bernanke was the chairman and the Fed was doing a bunch of things it had never done before to keep the financial system. afloat. Here's Sarah Binder at the Brookings Institution. And so Bernanke, as chair, said, I need to explain what we're doing so that markets can adjust, businesses can adjust, so everybody can know what we're going to do going forward because they know we can't lower rates. The lower bound was here, right? Interest rates were basically zero. And what Bernanke was doing is what's come to be called forward guidance. And in 2011, Bernanke started holding press conferences after every other meeting, basically four times a year. One thing that happened immediately is the meetings without press conferences

came to be observed by market participants as less important, less active, less live. Chair Yellen, whose idea press conferences were in the first place back when she was vice chair, she kept press conferences at four times a year. And then Jay Powell in 2019 started doing pressers after every meeting. Here's Kunal Sangani at Northwestern University. By making every meeting live, you're getting yourself into giving a lot more forward guidance, so a lot more guidance about how interest rates are going to unfold in the future. And one of the tradeoffs of that is, you know, that forward guidance could turn into forward handcuffs.

Which is Chairman Warsh's point. Warsh, by the way, has not actually said how many press conferences he might do. I think it's an open question whether eight press conferences a year is the right amount or whether scaling back would do the job. while not sort of impeding the ability of the Fed to react quickly and still make policy decisions on a short horizon. We're dancing around the big question. How does Warsh want an envision leading the Fed?

And with what consequences for president, for his relationship with Congress, and obviously for how markets interpret what the Fed's going to do. The Warsh dance starts tomorrow, 2.30 Eastern. Stay tuned. You might have seen this a couple of days ago that last month for the first time solar supplied more electricity in this country than coal did. And that's despite the Trump administration's hostility to renewable energy and its support of coal. Late last year, the administration ended a federal tax credit for residential rooftop solar panels. But commercial and utility scale projects still do qualify for the next couple of weeks anyway. Marketplaces Caitlin Tan has more on that one.

I called up Solar Montana, a solar installation company. and I got Belinda Romero on the phone. We're doing very well. We have quite a few commercial jobs that we're working on. They're putting solar panels on libraries, colleges, fire stations, and there's federal money still on the table. We have a electronic sign out in front of our building, and that's what it's advertising, letting commercial owners know.

Know about the 30% tax break on installation costs. It can be tens of thousands of dollars in savings. but that's mostly going away July 4th under the Trump administration changes. What we're going to see over the next three weeks is lots and lots of solar projects beginning construction. Pavel Monchanoff is with Raymond James. The good news is starting construction is not difficult. It can even be as simple as purchasing some of the equipment up front and keeping it in a warehouse. After that, there's still a four-year window to get the same.

the panels installed and pumping electricity. This has created a runway of work to be completed. Rachel Mountain is with Namaste Solar, an installation company in Colorado. She says ordering supplies like the solar panels, inverters, batteries. It hasn't been too difficult. A lot of manufacturers have started domestically producing equipment. Partly because of the demand from projects trying to get the tax credit. But what will solar demand look like post-2030?

after the tax credits expire. Shannon Anderson with Solar United Neighbors isn't worried. The industry is excited to see this new era and to see where we can go again in terms of reducing costs in other ways. Her group is encouraging people to pool their resources, buy solar in bulk, and some states are even offering their own tax credits. I'm Keelan-Tan for Marketplace. There are a bunch of ways to figure out what's going on in this economy. Data, of course, that's got its uses. Analysts and economists, they're pretty good, too.

Best, though, the people who actually make this economy go. Patrick Smith is one of them. He runs Loftus Ranches. That's a hops and Apple Farm up in Yakima, Washington. Patrick, it is good to talk to you again. Good to talk to you, Kay. All right, first things first. How are things at Loftus Ranches?

Yeah, I mean, one of these days, I hope that we have one of these calls, and I can say costs are down, prices are up, and everything is, everything's going great. Today is not that day. There's been plenty in the press lately about cost pressures on the farms, whether it's fertilizer prices, diesel prices, obviously a lot of cost pressures that we're facing. And here in Washington State, not only are we facing a drought yet again this year, but USDA earlier this year came out with a report, banking all the states by one measure of farm profitability.

And here in Washington, we had the distinction of coming in dead last in that report, 50th out of 50 states. So it's been a rough go for the farm economy here in Washington lately. Yeah. So this basically echoes a conversation I had with a corn and soybean farmer that we know in Iowa, not to, you know, play one against the other.

But once again, this is farmers being price takers, first of all. you guys don't get to decide. And also just the macro sense that farming is really hard now. Yeah, certainly. The inability for us to pass on cost increases is a major part of why we're seeing such economic difficulties on the farms. A lot of farms are struggling to stay in business. I mean, here in Washington State, we just saw one of the largest tree fruit growers in the state filed bankruptcy within the last couple of weeks.

But it's just kind of indicative of the state of things in this industry right now. Yeah. Well, let me ask you as a tree fruit grower, right? You grow apples. Also hops, we should say, as we've said many a time. What are the crops looking like? I mean, you know, too many crops is bad because then prices go down, but you got to have crops to take the market. How are things?

Yeah, we're starting to finally see some acreage coming out of production. So here, Washington. Really? So, wait, sorry, so this is, so, well, that's really interesting, you say finally, because you're an apple guy and apples, obviously, you've got to grow the trees and this and that, and it's not like you can just turn off the switch. Right, right. And so that's been one of the biggest problems in agriculture here in Washington State, really throughout the West, where we're a lot more heavily indexed to these permanent crops. And these cycles just repeat themselves over and over again. And so we entered this period. of structural oversupply where the industry was just producing far more than was really demanded and forces farmers to eat the cost increases that we've seen over that period of time. Can I ask what's going to sound like a really silly question to a guy whose life this is,

but how do you take parts of your acre, your apple acreage out of production? Do you like cut down the trees? Do you not fertilize? What do you do? Yeah, chainsaws are most effective. Wow, wow. That seems so drastic. It is, it is. But, you know, the fact is, is that on our one farm, you know, we have orchard blocks each year that we evaluate. And when we look at it, we can't cover the cash cost of growing it. And so without the visibility to pricing improving, how long can we lose money just on labor, fertilizer, crop protection products? You know, in some cases, invest in 40, 50, $60,000 an acre, getting these trees into production. But at the end of the day, you know, losing $4,000 or $5,000 an acre year over years, not that interesting.

Perhaps I'm over-romanticizing this, but doesn't it just take a little piece of your soul to cut down all these trees? Oh, yeah, absolutely. Especially when there's no great alternatives to go into. I mean, without American consumers deciding to. you know, significantly increase their consumption of fresh apples. The only real way for the industry to get to a place of relative health and sustainability is to reduce production. Patrick Smith, Loftus Ranches, Bell Brewering, and various other side hustles.

Patrick, thanks a lot. Always good to talk to you. Of course. Thank you. Okay. Appreciate it. Coming up. There's a mansion down.

Oh, okay. First, though, let's do the numbers. Downdell shows up 328 today. That is two-thirds of 1%. 51,99. The NASDAQ subtracted 307 points, about 1.2% there, 26,376.S.p. 500 down 42.6%. 75 and 11. Some of those bond selling technology companies that Henry Up was telling us about, NVIDIA gave up 2.4%. Today, Alphabet pocketed 1 and a 10th percent. Amazon.com. Pretty much unchanged. Dave and Buster's entertainment, missed analysts' expectations and reported that comparable store sales were down more than 5% for the quarter. Ticker symbol on that one, play PLAY, down 6 and a quarter percent. Also, shout out to the parents out there. Good stuff with their kids there. Anyway, price wars in the pizza business. I've convinced

Young Brands to get out of the pizza business. It is selling Pizza Hut to a private equity firm. Young Brands heated up 2% on the day you're listening to Marketplace. Right now we are living through some of the most tumultuous political times our country has ever known. I'm David Remnick, and each week on the New Yorker Radio Hour, I'll try to make sense of what's happening, alongside politicians and thinkers like Corey Booker, Nancy Pelosi, Liz Cheney, Tim Walts, Katanji Brown Jackson, Newt Gingrich, Robert F. Kennedy Jr., Charlemagne the God, and so many more. That's all in the New Yorker Radio Hour, wherever you listen to podcasts. This is Marketplace. I'm Kai Rizdal. Fox has entered the streaming chat. The media company that has long relied on straight-up cable TV for its success said this week it is buying Roku for $22 billion. Roku as in the streaming program that comes automatically installed on smart TVs in more than 100 million households. It's the thing you see before you click on the app that you actually want to watch. Marketplace is Kelly Wells has more. This is a smart play for Fox, according to John Gigan Gack, who's found. and head analyst at Hub Entertainment Research.

Because out of all the problems that TV watchers face these days... Their biggest frustration is how complicated it is to use television. Which is where a streaming aggregator like Roku comes in. Gigan Gaggack says his company has studied how TV watching has changed. The number one thing that they turn on first has switched from some kind of a cable box to an app inside of a smart TV. And for 100 million households, that's Roku. Now Fox can sell ads to those people directly on the Roku platform, which means more money, says Peter Cohen, who teaches management practice at Babson College.

People would then be targets on which to spend advertising, so they could bring in advertising revenue. But more advertising is only part of the revenue stream. It's about owning the home screen that lives between us and content. Chief Advisor Dave Nicholson with the Analytics Group Futurum says that gives Fox an opportunity to collect data about what users are watching when, and it lets Fox advertise its own services. I can be watching a YouTube video on Apple TV, and I will get a little box that will come up and that will say, hey, Formula One race is starting in 15 minutes. A big benefit for a company that relies so much on its news and sports offerings.

On top of that, being the bridge between users and content pays well, too, says Brandon Katz, with the Entertainment Analytics Company Greenlight Analytics. Suddenly, I want to watch Netflix and I have a Roku device. Well, Fox is taking a bite out of that subscription and advertising revenue and all the other streamers and apps that you subscribe through your Roku app as well. Kat says Fox seeded the content creation race to the likes of Disney and Netflix years ago. But claiming this gatekeeper role, Katz calls that move a home run for Fox. I'm Kaylee Wells for Marketplace. This is shaping up to be, as you know, the summer and perhaps.

perhaps the fall of the ginormous initial public offering. SpaceX last week, Anthropic and Open AI set to follow suit. SpaceX worth $2 trillion now, give or take. The latter two of them based in San Francisco, pushing valuations of a trillion dollars apiece. Even before all that IPO cash, though, San Francisco has had the highest and the fastest rising home prices in the country. That's according to Redfin.

So, Marketplace's Megan McCarty Carino takes us to the front lines of the AI boom. A turnkey restored Edwardian home hit the market last month for just under $3 million. Right outside the neighborhood known as Cerebral Valley for its concentration of AI workers. We've got this beautiful viola marble fluted, backslash. Realtors Crystal Pollock and Kelly Bennett show me some of the home's unique selling points. There's a motorized stairway to the attic that folds into the ceiling. Two car parking. Two car parking, which is also a rarity.

But perhaps the most distinctive thing about this listing is one of the forms of payment accepted, shares in Open AI or Anthropic. We have had our open houses, a lot of folks come in and be like, oh my gosh, I wish this was six months from now. And so when they were talking about it, the seller said, well, yeah, I would take, I would just take their stock for it. AI equity has literally become the currency of the market. Some shareholders have been able to cash out stock before the IPOs by selling to new investors. It's driving a frenzy of bidding wars. There's a mansion deficit. That was the term I coined.

Yeah, he said mansion deficit. Luxury real estate advisor Alexander Lurie, who also happens to be the mayor's brother, shows me around one of these rarities on a hilltop stretch known as, billionaires row. So we're looking at the whole span of the bay, the mouth of the bay, the Golden Gate Bridge, to Alcatraz. It's a $20 million view. Lurie says he knows of about 50 buyers shopping at that price. Typically, fewer than 10 such properties go up for sale in the city in an entire year. So people are offering many millions of dollars above asking price or making generous deals before a house ever gets listed publicly. We are in unprecedented times because of the access to liquidity, the access to wealth.

San Francisco is the perpetual gold rush town. The mansions of Billionaires Row were built with the fortunes of mining and railroads before they were claimed by the barons of silicon and software. Ted Egan, the city's chief economist, has seen his share of booms in his two decades in San Francisco. But nothing on this scale. The amounts invested in AI companies are orders of magnitude bigger than in previous tech waves, but the wealth is accruing to a small group, as the rest of the industry contracts. Egan says the city lost about 40,000 jobs in the last three years, mostly in

tech. It's really a tug of war between something that's in decline and something that's growing rapidly. That dueling reality is taking a psychological toll on the city, says D.D. Das, a former engineer who's now a partner at a VC firm that's a major investor in Anthropic. To see it up close and personal is it's very stark. I mean, overnight, I have friends who are worth billions of dollars. And others shaken by a newfound sense of precarity, even with enviable big tech salaries. People who are like, you know, I felt like I did everything right in my life. I went to, I don't know, Stanford at MIT. I was top of my class. I took the right job. I did everything right, but I don't know if my job even has value anymore.

He says the term permanent underclass gets thrown around a lot in tech circles, unironically. It's the idea that if you miss this wave of wealth, there may never be another. A fear of missing out is also palpable in the real estate market, says realtor Kelly Bennett, who's working on that Edwardian listing. You know, once these companies IPO, what's going to happen to the home prices then? I mean, you know, we might look back on this time and think, oh, shoot, I wish I'd gotten in in spring 2026. Yeah. Back when you could still get a home for $3 million.

In San Francisco, I'm Megan McCarty Carrino for Marketplace. This final note on the way out today, global context for whatever it is that the Fed is going to do tomorrow. The Bank of Japan raised its key interest rate today to. 1% even. That is the highest that rate has been since 1995. Odds are that the Fed's going to stand pat tomorrow with its key rate, set at a range of 3.5 to 3.75%. Jordan Menjee, Zoniel Maharaj, Janet Wynn, Olga Oxman, and Virginia K. Smith are the digital team. I'm Kai Rizzdahl.

We will see you tomorrow, everybody. This is APN. Cloud seating has been around since the 1940s. It involves releasing silver iodide particles into clouds, which cause water to freeze and fall out as snow or rain. And while the jury's still out on its potential as a water management tool, it's become a global industry nonetheless. I'm Amy Scott, and this week on the How We Survive podcast, we're talking to Augusta Storrico, a 25-year-old former teal fellow and the founder of Rainmaker, the business that's racing to save the great. Salt Lake from collapse. Cloud seeding is a tourniquet for our water supply situation. Maybe a damn good one, maybe more than a tourniquet. So is cloud seeding at scale the godsend

solution it seems to be? Find out this week on how we survive, available on your favorite podcast app.