The combined debt of the seven largest US technology companies, widely known as the Magnificent Seven, has increased nearly 45% to $578 billion by mid-2026, according to a report by SBI Research. The report warned that higher borrowing costs and rising Treasury yields could shrink their combined market value by $1.67 trillion to $2 trillion.
The Magnificent Seven comprises Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. The report said their combined debt, which stood at around $399 billion in 2025, is now nearly 1.7 times its 2023 level. It also flagged substantial off-balance-sheet commitments, including obligations related to purchases and investments, as companies continue to expand their artificial intelligence infrastructure.
Magnificent Seven borrowing tied to AI expansion
The rise in borrowing tracks the rapid expansion of AI infrastructure. Magnificent Seven companies are spending heavily on data centres, chips and computing capacity, and much of that spending is funded with debt alongside off-balance-sheet purchase and investment obligations. SBI Research said the scale of the commitments raises questions about the financial risks linked to that expansion.
“Higher borrowing costs and rising Treasury yields could put pressure on their valuations by increasing the discount rate applied to future earnings,” the report cautioned. Using an equity duration approach, the report estimated that a rise in yields could result in a potential market capitalisation decline of around $1.67 trillion to $2 trillion for the Magnificent Seven, whose combined market value was estimated at approximately $23 trillion.
Magnificent Seven face a market test in November
The report also pointed to the expected entry of Anthropic into public equity markets, likely around November 12, with a target valuation of $1.5 trillion to $2 trillion. It described the proposed listing as a “high-stakes litmus test” for the financial viability of the AI boom, allowing public investors to assess whether rising enterprise revenues can justify the substantial infrastructure and computing costs involved.
Anthropic is not one of the seven companies, but its listing will give public investors a direct read on how the market values an AI company whose costs are dominated by infrastructure and computing. A strong reception would suggest investors still accept high spending in exchange for revenue growth. A weak one would add to doubts about whether AI revenues are keeping pace with the money going into capacity, and the Magnificent Seven would feel that verdict first.
Magnificent Seven debt and the Federal Reserve
Beyond technology companies, SBI Research highlighted the impact of rising bond yields on the US Federal Reserve’s holdings of government securities. Its unrealised losses on Treasury holdings increased by $26.3 billion, from $535.3 billion in December 2025 to $561.5 billion in June 2026. During the same period, the US 10-year Treasury yield rose from 4.18% to 4.44%.
Higher yields reduce existing bond prices, lowering the market value of Treasury securities held by the Fed and increasing unrealised losses, the report said. It clarified that the decline in the Federal Reserve’s total assets largely reflected securities runoff under its quantitative tightening programme, rather than an automatic write-down caused by rising yields.
The report’s warning rests on a simple mechanism. When Treasury yields rise, the discount rate applied to future earnings rises too, and that lowers the present value of earnings expected years ahead. Technology companies with high expected growth feel that effect more than most, because a larger share of their value sits in earnings far in the future.
The scale of the borrowing also matters because it sits alongside purchase and investment obligations that do not appear in headline debt figures. Those commitments lock companies into spending on infrastructure even if revenue growth slows, which leaves less room to cut back quickly. SBI Research flagged those obligations as part of the risk, not as a footnote to it.
The Magnificent Seven report landed in New Delhi on November 2. Its central warning is that debt taken on to fund AI infrastructure leaves the largest technology companies more exposed to borrowing costs than their size suggests. If yields stay high, the discount rate applied to future earnings rises with them, and the combined market value of the Magnificent Seven falls with it.