Morgan Stanley Predicts Global AI-Related Bond Issuance Will Approach $570 Billion by 2026
Morgan Stanley's latest report indicates that global AI-related bond issuance is expected to approach $570 billion by 2026, more than doubling from last year. As of the end of May, approximately $236 billion has been issued, about four times the amount from the same period last year. With capital expenditures from hyperscale cloud service providers expected to exceed $1 trillion by 2027, the pace of bond issuance will further accelerate in the second half of the year.
Giants like Alphabet and Amazon have issued a large amount of euro-denominated bonds to broaden their financing channels, while semiconductor companies tend to favor short-term financing with installment repayment.
Source: Public Information
ABAB AI Insight
The tech giants have previously supported the expansion of AI infrastructure through multiple rounds of debt financing. Morgan Stanley's forecast continues the trend of Amazon, Alphabet, Meta, Microsoft, and Oracle shifting from profit coverage to high-leverage financing. In 2025, the five giants are expected to issue a total of $121 billion in corporate bonds, far exceeding the average annual level of $28 billion from 2020 to 2024, with the ratio of capital expenditures consuming operating cash flow rising sharply to nearly 100%.
In terms of capital pathways, the giants are mobilizing funds through multiple channels such as bonds, euro-denominated bonds, equity, and convertible bonds to fill the gap. Google recently completed $84.75 billion in equity financing, which supports GPU clusters and data center construction while reducing financing costs through diversified currencies and structures, providing long-term capital support for AI training and model iteration.
Similar to the early capital expenditure explosion period in cloud computing, the current AI infrastructure boom is in a phase of transitioning from profit-driven to high-leverage financing, reinforcing market expectations for the AI capital cycle as predicted by Morgan Stanley.
Essentially, this reflects capital concentration and regulatory changes: the surge in AI debt directly fills the gap between capital expenditures and profits, accelerating the concentration of tech capital from traditional profit models to high-leverage infrastructure investments through bond and equity financing, reshaping the AI industry chain from software dominance to an integrated pricing power and risk allocation structure involving hardware, energy, and financing.
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The greater the capital expenditures exceed profits, the more inevitable the debt leverage becomes.
The more diversified the financing channels, the more sustainable the expansion speed.
The more intense the AI boom, the more bond and equity issuance becomes the new infrastructure.