Big Tech had it good under former Fed Chair Jerome Powell.

He overcommunicated the Fed’s next moves.

He popped up in intrameeting interviews.

And most importantly, he didn’t do anything with interest rates for some time. If anything, he leaned on the side of cutting rates, even as the Iran war drove up inflation.

But new Fed Chairman Kevin Warsh reminded the world this week that he will be a different beast for markets. Warsh will say less, review all old Fed practices, and, in the near term, defend independence. And that could mean an interest rate hike to beat back inflation once and for all.

All of this is sucky news for Big Tech at this important moment.

Big Tech is becoming hooked on debt to fuel its grandiose visions of widespread AI adoption. In years past, aggressive investments were largely driven by internally generated cash. These companies have used the easy-money ways of the Powell-led Fed to spend willy-nilly. A higher cost of capital under Warsh could upset the apple cart.

AI-related companies have issued about $140 billion in investment-grade bonds year to date, accounting for 49% of the total investment-grade issuance, according to new analysis from the Kobeissi Letter.

In high-yield corporate bonds, AI-related companies have accounted for 38% of total issuance, or roughly $21 billion year to date.

The most headline-making debt raise of the year has been out of Alphabet (GOOG, GOOGL).

Alphabet became the first tech company in decades to issue a 100-year bond. In total, it raised $31.51 billion in February across its global bond offering, tapping sterling and Swiss franc markets alongside US dollar issuance.

“The AI investment boom is reshaping how capital is allocated across the entire financial system,” Kobeissi researchers said.

Google, Amazon (AMZN), Microsoft (MSFT), and Meta (META) collectively plan to allocate $725 billion to capital expenditures in 2026 — up a staggering 77% from last year’s already record-breaking $410 billion.

Amazon is projecting $200 billion in capital expenditures, Alphabet is targeting $175 to $185 billion, Meta is guiding $115 to $135 billion, and Microsoft is tracking toward $190 billion for the calendar year.

The five main hyperscalers have plans to add roughly $2 trillion in AI-related assets to their balance sheets by 2030. That goes a long way toward explaining the need to take on new debt, possibly at a higher interest rate borne by the Warsh-led Fed.

Singling out Meta, its total debt has climbed from about $36 billion in 2023 to $84 billion at the end of the first quarter, according to Yahoo Finance AlphaSpace.