Automatic translation: Originally published in Finnish 14/10/2026, 04:45 GMT. Give feedback here.

According to IMF estimates, nearly USD 2,000 billion in additional excess savings has accumulated in the global economy since 2023. That is one-third more than in the corresponding period before the 2008 financial crisis. This time, however, the savings are not flowing into US government bonds, but into the AI boom.

I recently read an interesting article by Bloomberg that helps explain the current rise in interest rates and capital flows into AI companies. Namely, in the early 2000s, central banks in Asia and oil-producing countries invested their surpluses in U.S. government bonds, thereby driving interest rates down. Now, central banks are buying fewer government bonds, partly due to growing U.S. debt and geopolitical risks. These savings are increasingly managed by hedge funds and pension funds, which take on more risk. Between the beginning of 2024 and July of this year, foreign investors made net purchases of U.S. shares totaling around USD 1,500 billion. According to Bloomberg Economics, foreign investors hold at least USD 4,900 billion worth of U.S. shares related to artificial intelligence, an amount equivalent to Germany's annual GDP.

Asian capital is particularly fueling the boom. According to Bloomberg figures, South Koreans made net investments of USD 17 billion in U.S. shares in 2023, but already USD 69 billion in the 12-month period ending in July.

The profits of Taiwanese and South Korean chip giants are hitting records: according to preliminary data, Samsung's July–September operating profit was ~USD 80 billion. Meanwhile, Bloomberg's Magnificent Seven index has risen by more than 380% since the beginning of 2023. Asian capital is thus fueling the surging share prices of tech giants.

As we know, the scale of technology investment is huge. Stijn Van Nieuwerburgh of Columbia University has calculated that nearly USD 9,000 billion will be invested in AI infrastructure by 2032. Relative to GDP, it would surpass the 1900s railway boom. So far, the AI boom has already surpassed the Apollo space program, the construction of 1990s telecommunications infrastructure, and the shale oil revolution (see figure).

Source: TS Lombard

Unlike in the early 2000s, interest rates are now rising. The interest expenses of indebted governments are growing, and public debt relative to GDP is two to three times higher compared to the late 1990s tech bubble. According to Fed economists, the dynamics of the government bond market have changed as price-sensitive hedge funds have replaced passive central banks. Hedge funds are estimated to own a record 8% of the US 32,000 billion dollar bond market, and they often use government bonds as collateral for risk investments.

The flow of capital to where technological disruption is taking place is efficient in itself, as former IMF Chief Economist Pierre-Olivier Gourinchas noted in the article. The risk is not that central banks will sell their government bonds, but that private investors will sell them to cover losses elsewhere. Therefore, it is worth remembering that the same capital flow that has driven up tech stocks can, if it reverses, also cause volatility in the bond market.