Morgan Stanley forecasts global AI-tied debt issuance will more than double to nearly $570B in 2026, as hyperscalers seek alternative funding for AI capex needs
Morgan Stanley forecasts AI-related global debt issuance to more than double to nearly $570 billion in 2026, pointing to rising bond supply …
Context & Ripple Effects
Related coverage traces a clear financing shift: Morgan Stanley had estimated that hyperscalers would need outside capital for a substantial share of planned AI infrastructure through 2028, while subsequent reporting showed AI-linked borrowers becoming a major investment-grade debt segment.
Bond-market activity has already accelerated, with 2025 tech issuance rising sharply and May unsecured hyperscaler supply exceeding the prior year’s total. The forecast therefore extends an observable move from internally funded technology spending toward capital-markets financing.
First-order effects
- Hyperscalers and other AI-infrastructure borrowers are likely to bring substantially more debt to market, making bond issuance and other external funding more central to financing their capital-expenditure plans.
- Credit investors gain a larger pool of AI-linked paper, while issuers with established access to investment-grade markets are better positioned to fund infrastructure than smaller, less proven AI companies already facing higher borrowing costs.
Second-order effects
- Heavier supply can make funding costs and investor appetite a more immediate constraint on AI build-outs, forcing issuers to compete for capital and to diversify among bonds, private capital and other funding sources.
- The financing gap between cash-rich hyperscalers and smaller AI-infrastructure firms could widen if investors continue to demand higher rates for businesses without proven economics.
Third-order effects
- If this issuance pattern persists, AI infrastructure will become increasingly tied to credit-market conditions rather than being financed chiefly from technology companies’ operating cash flow.
- The investment-grade market may continue to concentrate more exposure in AI-linked borrowers, increasing the importance of how investors assess infrastructure utilization, cash generation and leverage across the AI supply chain.
The trend: AI investment is evolving into a capital-markets story, with the scale of infrastructure spending pushing even the largest technology buyers toward more debt and alternative financing.