U.S. tech giants tapping foreign bond markets as AI-related debt soars
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- Amazon and Alphabet issued US$60-billion in bonds across multiple currencies in the past 12 months to fund AI infrastructure, with deals setting borrowing records in euros, yen, Canadian dollars, Swiss francs, and sterling, per LSEG.
- Amazon raised €14.5-billion (US$16.56-billion) in March through an eight-part euro deal—the largest ever in the euro corporate bond market—per LSEG.
- Alphabet sold the first 100-year bond from a tech company since 1997 and has accumulated US$100-billion in outstanding debt across six major currencies, per CFO Anat Ashkenazi.
- Hyperscaler capital expenditures are estimated at around US$725-billion this year, nearly double mid-2025 levels, with spending rising faster than operating cash flow, per BNP Paribas.
- Bankers are now structuring data-centre lease-backed deals, including an US$810-million note from Stingray Compute (owned by Cipher Digital) backed by a lease to Amazon, which was oversubscribed nine times.
- AI-related debt in the U.S. is approaching 15 per cent of total investment-grade issuance, and Morgan Stanley's Teddy Hodgson said AI debt volume could push investment-grade issuance above US$2-trillion for the first time in 2026.
Why it matters: Hyperscalers are offloading borrowing into foreign currencies—setting records in five of them—because U.S. debt markets can't absorb the $725 billion in AI capital expenditures expected this year. For investors, the open question is whether the AI-debt share of investment-grade issuance, which has already surpassed 2025's full-year total, can keep expanding without crowding out other borrowers or forcing up yields.
