Morgan Stanley forecasts AI-related global debt issuance to more than double to nearly $570 billion in 2026, pointing to rising bond supply and credit market activity as hyperscalers turn to alternative funding sources to meet massive AI-driven capex needs.
Here are some details:
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- Tech companies that have long relied on strong cash flows are increasingly turning to debt financing as investment needs surge
- Morgan Stanley estimates AI-related global debt issuance stood at nearly $236 billion as of May 31, 2026, fourfold more than the same period last year
- Hyperscalers Alphabet, Amazon, Microsoft and Meta are expected to spend $700 billion in outlays this year
- Morgan Stanley expects issuance to ramp in second half of 2026, as hyperscaler capex surpasses $1 trillion in 2027
- “Hyperscalers have been broadening their investor base through non-USD issuance,” the brokerage said
- “Fundamental (economic) backdrop remains strong, but for now we think (bond) price action is being mostly driven by supply expectations,” Morgan Stanley added
- Financing for chip companies, which is seeing an uptick in public and private markets, is shifting to shorter-term deals that are fully repaid over time – Morgan Stanley
(Reporting by Kanishka Ajmera in Bengaluru; Editing by Mrigank Dhaniwala)
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Source:
Reuters
