BlockBeats news: On June 10, Morgan Stanley’s latest forecast indicates that global AI-related bond issuance could approach $570 billion by 2026, more than doubling from last year. As of the end of May, approximately $236 billion in AI-related debt financing had been issued globally, roughly four times the amount issued during the same period last year. With massive cloud service providers’ capital expenditures expected to exceed $1 trillion in 2027, Morgan Stanley anticipates an accelerated pace of bond issuance in the second half of the year. To diversify funding sources, giants such as Alphabet and Amazon have issued substantial amounts of euro-denominated bonds, expanding their financing currencies beyond the U.S. dollar market. Semiconductor companies are increasingly favoring short-term financing with installment repayment structures.
The fundamental cause of the surge in AI-related debt is that capital expenditures by tech giants have far exceeded their ability to cover costs through profits. According to Bank of America data, Amazon, Alphabet, Meta, Microsoft, and Oracle are projected to issue a combined $121 billion in U.S. corporate bonds in 2025—far surpassing the average annual issuance of $28 billion between 2020 and 2024. UBS estimates that in 2026, capital spending by hyperscale cloud providers is expected to consume nearly 100% of operating cash flow, compared to a decade-long average of only about 40%, with debt financing filling the gap. Beyond bond issuance, equity financing is also accelerating—Google recently completed $84.75 billion in equity capital raises, and Barclays expects the likelihood of Meta, Microsoft, and Amazon issuing equity, mandatory convertible bonds, or equity-linked securities to rise significantly in the near future.