AI Debt Issuance Surges to $570B

Global debt issuance tied to artificial intelligence is projected to exceed US$570 billion in 2026, more than double the previous year's total, according to Morgan Stanley. This surge is driven by major technology companies, including Alphabet Inc., Amazon (company), Microsoft, and Meta Platforms, which are significantly increasing their capital expenditures on AI infrastructure, such as data centers and computing capacity. These companies, traditionally reliant on strong cash flows, are now turning to debt financing as investment needs outpace internal funding capabilities. By May 31, 2026, AI-related global debt issuance had already reached nearly US$236 billion, four times the amount recorded in the same period last year. Hyperscaler capital expenditures are expected to reach $700 billion this year and surpass $1 trillion in 2027. The trend also involves hyperscalers broadening their investor base through non-USD issuance. The increased bond supply is influencing market activity and pricing in credit markets, with a shift towards shorter-term deals for semiconductor companies benefiting from AI demand.