The rapid expansion of artificial intelligence is reshaping global credit markets as technology companies seek new ways to fund massive investments in data centers, chips and computing infrastructure. Morgan Stanley expects AI-related global debt issuance to more than double and reach nearly $570 billion in 2026, reported Reuters.
The investment bank estimates that AI-related debt issuance had already reached nearly $236 billion by May 31, 2026, reported Reuters. That figure is about four times higher than the amount recorded during the same period a year earlier.
Major technology companies have traditionally relied on strong cash flows to fund growth. However, the scale of investment required for artificial intelligence is pushing many firms to seek additional funding through debt markets.
Why are tech companies borrowing more?
Morgan Stanley expects hyperscalers such as Alphabet, Amazon, Microsoft and Meta to spend around $700 billion on capital expenditures this year alone, reported Reuters. Much of that spending will support data centers, AI chips, networking equipment and energy infrastructure needed to run advanced AI models.
The brokerage believes financing needs will continue to rise over the next several years. It expects debt issuance to accelerate during the second half of 2026 as spending plans expand further. According to its estimates, capital expenditure by hyperscalers could exceed $1 trillion in 2027, reported Reuters.
The growing use of debt financing marks a significant shift for companies that historically generated enough cash to fund most of their investments internally. While these firms remain financially strong, the size and speed of AI-related spending have created demand for additional funding sources.
Morgan Stanley said hyperscalers are broadening their investor base through bond sales outside the US dollar market, reported Reuters. By issuing debt in different currencies, companies can access a wider range of investors and potentially secure more flexible financing options.
The trend is creating new opportunities for global credit markets. Investors are showing strong interest in debt linked to artificial intelligence because many of the companies involved maintain strong balance sheets and dominant positions in their industries, according to Reuters report.
What does it mean for credit markets?
The increase in bond issuance is likely to influence pricing across credit markets. Morgan Stanley said the overall economic backdrop remains supportive, reported Reuters. However, expectations of large amounts of new bond supply are playing a major role in market movements.
As more technology companies issue debt, investors may demand higher yields to absorb the additional supply. Analysts expect bond markets to closely monitor financing plans from major AI players over the coming months, reported Reuters.
The financing landscape is also changing for semi-conductor companies. Morgan Stanley said chipmakers are attracting more funding from both public and private markets as demand for AI hardware grows, reported Reuters. At the same time, financing structures are shifting toward shorter-term deals that are fully repaid over time rather than relying on long-dated obligations.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.