Microsoft sold $25 billion of notes rated AAA by S&P and Aaa by Moody’s, according to its pricing term sheet dated 29 October. A day later, the Financial Times reported that Blackstone had told investors Anthropic is likely to be rated in the double-B range after its IPO, below investment grade.
On S&P’s scale, the double-B range sits 10 to 12 notches below AAA, by our arithmetic. The two bracket four credit signals on AI borrowers in two days, 29 and 30 October, with Meta and Intel in between.
Short explainer · AAA vs Double-B: 10-12 Notches Apart
A vertical news Short summarising this story. Figures come from Microsoft’s term sheet, Reuters, Bloomberg and the FT as summarised; our arithmetic is labelled.
Business Pill · Financial Conditions
A short Business Engineer explainer on financial conditions: how rates, spreads and stock prices together set what borrowing costs. It teaches the general idea only and does not discuss the companies in this story.
The key insight: Within two days, the price of credit for AI borrowers ran from AAA-rated Microsoft notes to a double-B range Blackstone expects for Anthropic, 10 to 12 notches apart on S&P’s scale by our arithmetic.
The term sheet lists eight fixed-rate series totalling $23 billion and two floating-rate series of $1 billion each. The fixed-rate series priced at spreads of 25 to 105 basis points over their benchmark Treasuries.
By our arithmetic, the eight fixed-rate series carry a size-weighted spread of about 64 basis points and a size-weighted yield to maturity of about 5.61%. The longest series, due 2066, yields 6.356%, according to the term sheet.
Credit signals on AI borrowers on 29 and 30 October 2026, placed on S&P’s long-term rating scale: Microsoft’s $25 billion of notes rated AAA, Meta’s AA- with a negative outlook, and the double-B range Blackstone expects for Anthropic, per the FT. Notch counts and Microsoft’s weighted yield are FourWeekMBA arithmetic.
Second Rung: Meta Keeps AA-, Outlook Turns Negative
S&P Global Ratings revised its outlook on Meta to negative from stable on 30 October and kept the AA- rating, as we reported from S&P’s ratings-actions list. AA- is three notches below AAA.
Reuters, reporting S&P’s research, wrote that “S&P now forecasts Meta will generate FOCF deficits of $39 billion in 2026 and $71 billion in 2027”. By our arithmetic, that is $110 billion over two years.
According to the same report, S&P “expects Meta to fund its 2028 cash shortfall entirely with debt”. A Meta spokesperson told Reuters: “We respectfully disagree with S&P’s assertion about Meta’s AI monetization capabilities”.
Third Rung: Intel’s Default Insurance at a Record
The cost of protecting Intel’s debt rose to a record on 30 October, Bloomberg reported. “The protection price for Intel bonds for five years surged as much as 22.4 basis points Friday morning to 127.9 basis points a year, according to ICE Data Services”, Bloomberg wrote, adding: “Both are records”.
On $10 million of Intel bonds, 127.9 basis points comes to $127,900 a year, by our arithmetic. A default-swap premium and a bond spread over Treasuries are different measures, so the Intel and Microsoft figures are not directly comparable.
The Bottom Rung: Anthropic’s Expected Double-B
The FT headline reads: “Anthropic may not secure investment-grade rating after IPO, Blackstone says”. The article is behind a paywall; the details here come from summaries of it posted on X.
According to Wall St Engine’s summary, Blackstone told investors Anthropic is “likely to receive a credit rating in the double-B range after going public, below investment grade”, reversing an earlier expectation of an investment-grade rating by year-end.
The same summary says “Blackstone’s funds invested $9B in junior debt, earning yields above 10%” in Anthropic’s $63 billion Project North Star financing. By our arithmetic, that is more than 4.3 percentage points above Microsoft’s weighted yield, though the two are different instruments.
Per the FT as summarised, Moody’s, S&P and Fitch “have not yet formally issued ratings for Anthropic”.
The Structural Read
As we read the four signals together, the rating a borrower carries now sets what its share of the AI build-out costs to finance.
As we read the term sheet, Microsoft funded at about 5.61% across its fixed-rate series by our arithmetic, while the junior debt in Anthropic’s Project North Star financing earns above 10%, according to the FT as summarised.
As we read Reuters’ report, S&P’s concern about Meta is the size of the cash deficit it forecasts, $110 billion over 2026 and 2027 by our arithmetic, and how it gets funded.
Reuters, reporting S&P Global Ratings
“The agency said elevated spending could keep FOCF negative beyond 2028 and expects Meta to fund its 2028 cash shortfall entirely with debt.”
Three Implications
FOR AI LABS Wall St Engine’s summary of the FT report says a lower rating could make it more expensive for Anthropic to finance its infrastructure and limit access to pension funds and insurers.
FOR HYPERSCALERS S&P kept Meta at AA- and moved the outlook to negative; Reuters reports S&P forecasts deficits of $39 billion in 2026 and $71 billion in 2027.
FOR CHIPMAKERS Bloomberg reports the cost of insuring Intel’s debt hit a record 127.9 basis points a year, citing ICE Data Services.
The framework describes its subject as “How the money flows, where it cracks, what it buys, who can absorb it”.
As we read it, this week’s credit signals are the “who can absorb it” question priced by lenders and rating agencies. The framework is the owner’s argument, published in May 2026, and does not discuss these October credit moves.
Moody’s, S&P and Fitch have not yet formally issued ratings for Anthropic, per the FT as summarised; the double-B expectation is Blackstone’s, as reported by the FT. We did not read the FT article in full or S&P’s research on Meta, and S&P’s forecasts come from Reuters’ report. The sources do not say what rate Anthropic would pay on new bonds.
This Week In The AI Supercycle
Anthropic’s Reality Check, The Capital Squeeze, & The New World Order
This week’s issue: for two years the AI build-out was priced as a growthstory. This week it started being priced as a credit story.
Within two days, Microsoft priced $25 billion of AAA-rated notes, its fixed-rate series at about 64 basis points over Treasuries by our arithmetic; S&P turned Meta’s outlook negative; Intel’s default insurance hit a record; and Blackstone reportedly told investors Anthropic is likely to be rated double-B.
A note on sourcing. Microsoft’s figures come from its pricing term sheet filed with the SEC; S&P’s forecasts from Reuters’ report; Intel’s default-swap prices from Bloomberg, citing ICE Data Services; and the Blackstone expectation from the FT as summarised on X, all read on 31 October 2026. Notch counts, weighted yields and totals are our arithmetic. We did not contact Microsoft, Meta, Intel, Anthropic, Blackstone or S&P.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
