AI Debt
Due to the enormous capital expenditure plans of leading hyperscalers like Amazon, Google, and Meta, Morgan Stanley predicts that worldwide loan issuance for AI companies will surpass $500 billion in 2026.
According to a Reuters story, the investment bank predicts that as AI companies look for alternate sources of capital for their expansion ambitions, worldwide debt issuance may treble to $570 billion.
A number of big-bang funding plans have been announced recently for the AI buildout. Google parent Alphabet recently announced an $85 billion fundraising for its expansion of AI capabilities, including data centres and compute facilities. It also issued a rare 100-year bond in February for its AI funding requirement.
The global debt issuance related to AI has already reached nearly $236 billion by May 31, 2026, Morgan Stanley estimated, reported Reuters. This is a fourfold increase from last year.
The booming demand for frontier AI models, along with the focus to ramp up agentic AI, has led to AI companies like Anthropic and OpenAI announcing major spending plans. Both have confidentially filed for their public market debut. While Anthropic is valued at $965 billion, OpenAI is valued at around $852 billion.
The massive compute infrastructure needed to train these AI models has led to more capacity additions by hyperscalers and plans to spend even more capital to ramp up capacity.
Morgan Stanley estimates hyperscaler capex to top $1 trillion in 2027. It said that these hyperscalers are broadening their base by issuing more non-USD issuances.
Amazon recently issued C$14 billion ($10.04 billion) of Canadian dollar-denominated notes, Reuters reported, citing a final pricing term sheet filed with the SEC. The company that runs the cloud services AWS raised 14.5 billion euros ($16.88 billion) from an eight-part deal, the largest ever in the euro corporate bond market.
Hyperscalers are diversifying their funding as they plan to spend trillions of dollars on creating data centre capacity to match the compute demand in future.
Syed Ziyauddin is a media and international relations enthusiast with a strong academic and professional foundation. He holds a Bachelor’s degree in Mass Media from Jamia Millia Islamia and a Master’s in International Relations (West Asia) from the same institution.
He has work with organizations like ANN Media, TV9 Bharatvarsh, NDTV and Centre for Discourse, Fusion, and Analysis (CDFA) his core interest includes Tech, Auto and global affairs.
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