Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at signs of strain in the market for Big Tech bonds, the UK’s refusal to join Trump’s push to reopen the Strait of Hormuz, and Microsoft’s potential legal battle with Amazon and OpenAI.
But first, our number of the week…
17%
That’s how much of Qatar’s natural gas capacity has been knocked out by Iranian attacks, according to the latest estimates. Repairs could take three to five years, with an estimated cost of $26 billion to rebuild.
Sidekick Takeaway: Even if hostilities end tomorrow, the economic fallout from the Iran war will linger for years. Energy infrastructure is far easier to destroy than rebuild, and consumers will bear the cost.
Only have a minute to read? Here’s the TL;DR:
Bank of America has raised its forecast for Big Tech bond sales to $175 billion this year, but investors are signalling caution. With supply flooding the market, bond buyers can afford to be selective – raising questions about whether Big Tech can continue funding AI infrastructure at attractive rates.
Keir Starmer has declined Trump’s request to deploy British warships to help reopen the Strait of Hormuz, joining Germany and France in refusing military support. With Donald Trump severely criticising allies who have refused to aid the US, the rift could mark a permanent fracture for NATO.
Microsoft is considering legal action against Amazon and OpenAI over a $50 billion cloud deal that could breach its exclusive partnership with the ChatGPT maker. The dispute highlights how AI exclusivity deals are fraying as platforms scale and revenue pressure grows.
It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.
Hard to Swallow: Bond Market Struggles to Absorb AI Debt
For much of the past two years, investors have been focused on Big Tech’s insatiable appetite for capital.
The hyperscalers – Microsoft, Amazon, Meta, Alphabet, and Oracle – have been borrowing big to fund their AI ambitions. Estimates suggest the overall infrastructure rollout could reach $10 trillion.
But less attention has been paid to the other side of the equation: who’s actually buying all this debt?
Increasingly, there are signs that the bond market is struggling to keep up.
Buyers step back as issuance surges
Emphasising the scale of capital needed, Bank of America recently raised its 2026 forecast for hyperscaler bond sales by 25%:
Just a few months into the year, hyperscalers have already issued $110 billion in investment-grade debt in 2026. Another $65 billion is expected before year-end.
Despite the flood of issuance, bond buyers are signalling caution. Major institutions have noted they can afford to be ’patient and highly selective’ given expectations of continued bond supply.
In a recent report, a strategist at TD Securities noted that there appears to be ’too many bonds chasing too little money,’ citing a mismatch between corporate funding needs and investor liquidity available.
At the start of 2026, demand for AI-related debt felt almost insatiable. Investors grumbled about valuations, but there were plenty of willing buyers.
Now, signs of investor hesitancy are emerging – and the hyperscalers show no signs of slowing down.
Sidekick Takeaway: If bond buyers remain selective while central banks continue withdrawing liquidity, borrowing costs for Big Tech could rise meaningfully. That could complicate the AI infrastructure rollout – or at least make it even more expensive than it already is.
Dire Straits: UK Refuses to Deploy Warships as Oil Prices Surge
For decades, NATO has weathered disagreements over trade, defence spending, and foreign policy. But the war in Iran may prove to be a breaking point.
This week, Keir Starmer declined Donald Trump’s request to deploy British warships to help reopen the Strait of Hormuz.
The refusal puts the PM in line with Germany, France, and other European allies – all of whom have criticised the conflict and ruled out military support.
No coalition in sight
The closure of the Strait of Hormuz has sent energy prices soaring. But weeks into the war, there remains no coordinated strategy to reopen the chokepoint:
Brent crude has risen as high as $117 a barrel, while European gas futures surged as much as 35%. In the UK, the cost of heating oil has doubled for households.
Trump has scolded NATO allies for their refusal to assist, warning the alliance faces a ’very bad future.’ However, European leaders have dismissed the war as ’pointless’ and called for an immediate ceasefire.
At home, Starmer announced a £53 million energy package for vulnerable households. But with public finances already strained, the capacity for further support may be limited.
Starmer’s refusal to deploy warships is justified, especially following Trump’s bellicose threats against Greenland.
Nonetheless, the rift could mark a permanent fracture for NATO – while also prolonging the pain of high energy prices.
Sidekick Takeaway: The world is paying a heavy price for the US-Israeli war in Iran. To say nothing of the civilian casualties, surging energy prices will stoke higher inflation and lower growth. As Trump’s demands grow more strident, the war risks spiralling into an even more painful conflict.
Frenemies: Microsoft Weighs Legal Action Over Amazon-OpenAI Deal
The relationship between Big Tech firms often balances competition and collaboration.
But as the stakes rise, relationships are becoming harder to manage. This week, one of the industry’s most important partnerships edged closer to conflict.
According to recent reports, Microsoft is considering legal action against Amazon and OpenAI.
This dispute centres on a $50 billion cloud deal that could breach Microsoft’s exclusive partnership with the ChatGPT maker.
The high costs of exclusive models
The Amazon-OpenAI-Microsoft conflict highlights the challenges of preserving model exclusivity as costs mount:
Microsoft was one of OpenAI’s earliest backers, investing $1 billion in 2019 and $10 billion in early 2023. In return, Azure became the exclusive cloud provider for OpenAI’s models.
OpenAI, which is planning to IPO this year, is under pressure to generate more revenue. The firm recently inked a deal with Amazon to offer its ’Frontier’ platform through AWS.
The Amazon deal would help OpenAI scale – but at the cost of Microsoft’s exclusivity. For their part, OpenAI maintains that Frontier is a distinct product that falls outside Microsoft’s exclusivity agreement.
If Microsoft does bring a suit, it will likely be settled by private negotiation.
Nonetheless, the conflict highlights how model exclusivity contracts are becoming increasingly expensive to maintain as revenue pressures grow.
Sidekick Takeaway: With AI firms racing to scale, the alliances that defined the industry’s early years are beginning to fray. Exclusivity deals that once looked like moats may prove harder to defend than expected.
Notices
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