NEW YORK CITY, New York: Global debt issuance tied to artificial intelligence is expected to exceed US$570 billion in 2026 as major technology companies increasingly turn to borrowing to finance massive investments in AI infrastructure, according to Morgan Stanley.
The investment bank said AI-related debt issuance is projected to more than double next year, reflecting rising activity in credit markets as hyperscalers seek alternative sources of funding for growing capital expenditure requirements.
Morgan Stanley estimated that AI-related global debt issuance reached nearly US$236 billion as of May 31, 2026, four times the level recorded during the same period last year.
Technology companies that have traditionally relied on strong cash flows are increasingly turning to debt financing as investment needs continue to rise, the bank said.
The trend comes as some of the world's largest technology firms accelerate spending on artificial intelligence infrastructure, including data centers and computing capacity.
Alphabet, Amazon, Microsoft, and Meta are expected to spend a combined $700 billion on capital expenditures this year, according to Morgan Stanley.
The bank expects debt issuance to increase further in the second half of 2026 as hyperscaler capital spending continues to grow. It forecasts that hyperscaler capital expenditure will surpass $1 trillion in 2027.
"Hyperscalers have been broadening their investor base through non-USD issuance," the brokerage said.
Morgan Stanley said the outlook for the broader economy remains supportive, though expectations of increased bond supply are currently having a greater influence on market activity.
"Fundamental (economic) backdrop remains strong, but for now we think (bond) price action is being mostly driven by supply expectations," Morgan Stanley added.
The report also highlighted a shift in financing patterns among semiconductor companies, which are benefiting from strong demand linked to artificial intelligence.
According to the bank, funding activity for chipmakers is increasingly moving toward shorter-term deals that are fully repaid over time, with issuance rising across both public and private markets.
