As corporate borrowing tied to artificial intelligence shows no sign of slowing, bankers are coming up with new ways to sell ever larger volumes of debt.
The surge in spending on chips, cloud infrastructure and data centres has led large technology companies, known as hyperscalers, to increasingly issue bonds in currencies other than the U.S. dollar to tap a wider pool of investors and prevent saturation in the U.S. with colossal volumes of debt.
Companies such as Amazon.com AMZN-Q and Alphabet GOOGL-Q have issued US$60-billion in bonds in multiple currencies in the last 12 months.
“Alphabet and Amazon have diversified into other global markets in Europe, Canada, Asia,” said Teddy Hodgson, global co-head of investment-grade debt at Morgan Stanley. The large transactions have reshaped global bond markets and established new records for bond sales in euros, sterling and yen.
Amazon raised €14.5-billion (US$16.56-billion) in March from an eight-part deal, the largest ever in the euro corporate bond market, according to LSEG. Alphabet smashed records across markets, with its yen, Canadian dollar, Swiss franc and sterling deals all setting borrowing records in those currencies, according to LSEG data. Alphabet also sold the first 100-year bond from a tech company since 1997.
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The deals underscore the extent of funding needs facing hyperscalers. Capital expenditures for hyperscalers this year are estimated at around US$725-billion, according to BNP Paribas, nearly double the level seen in mid-2025. Spending is rising faster than operating cash flow, analysts said, creating the need to access external funding sources.
Data centre lease-backed deals rise
Meanwhile, bankers are trying new things when raising funds for AI startups or data-centre operators, such as structuring deals around pre-arranged data-centre leases – sometimes agreed upon before construction begins – to provide more visibility on future cash flows. The latest example was an US$810-million note issued by Stingray Compute, owned by Cipher Digital CIFR-Q, earlier this month. The offer was nine times oversubscribed, said Cody Gunsch, head of North America leveraged finance capital markets at Morgan Stanley.
The lending was backed by the data-centre lease to Amazon. Gunsch said the first deals of this kind, with structures inspired by construction loans, began last year and about 15 have since been sold to high-yield investors. Stingray Compute did not reply to requests for comment on the transaction.
Amazon said it regularly evaluates its operating plan and makes financing decisions such as issuing bonds across currencies accordingly. Alphabet referred to a statement by CFO Anat Ashkenazi, who said the company has accumulated US$100-billion in outstanding debt across six major currencies, and also to a comment by CEO Sundar Pichai about funding investments through its cash flow, debt and equity.
Demand holds despite supply surge
Still, investors are starting to question whether the market can continue to absorb supply. Bankers believe the volume of AI debt may be so large that it could push issuance in the investment-grade market above US$2-trillion for the first time ever in 2026, Morgan Stanley’s Hodgson said. Investment-grade deals from the hyperscalers have already surpassed their full-year 2025 total, and are on pace to reach BNP Paribas’ US$250-billion forecast this year.
“These are high-quality rated bonds, there is high appetite for them and there is a lot of liquidity around them in the market,” said Victoria Fernandez, chief market strategist and fixed-income portfolio manager at Crossmark Global Investments, referring to the hyperscaler bonds. “If we start to see companies coming to the bond market over and over again, then I think it starts to be a concern.” Some pointed to recent announcements of stock sales, indicating that in addition to equity needs, the need for debt will also grow.
“If they are now issuing equity, how much more debt will they need to raise? These are questions that investors are working through,” said Morgan Stanley’s Hodgson.
So far, there are no signs of saturation, even as AI-related debt in the U.S. approaches 15 per cent of the total investment grade issuance, according to Barclays data. “Although the percentage of recent AI-related debt to total issuance is high, it is still very low if you consider total debt in the broader investment- grade credit indices,” said Scott Schulte, global co-head of investment-grade debt syndicate at Barclays.
Jeff Given, head of developed-market fixed income at Manulife Investment Management, said hyperscalers are still ramping up investment and AI projects that are long-term in nature. That keeps the funding pipeline open. “As long as hyperscalers and data centres continue to be willing to spend more, demand is going to be there.”
