Morgan Stanley forecasts AI-related global debt issuance to more than double to nearly US$570 billion (HK$4.46 trillion) 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:
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 US$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 US$700 billion in outlays this year
Morgan Stanley expects issuance to ramp in second half of 2026, as hyperscaler capex surpasses US$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
Reuters
