Big Tech’s AI-Debt Binge Set To Hit New Eye-Popping Milestone

America’s largest technology companies were expected to borrow a record $420 billion in 2027 to finance the artificial intelligence (AI) boom as Wall Street investors increasingly demanded higher returns to absorb the flood of debt.

Debt issuance from hyperscalers was projected to jump 60% from 2026 levels as companies pour money into data centers, chips and other AI infrastructure, according to Goldman Sachs data reported Tuesday by Reuters. The borrowing surge was beginning to reshape the corporate bond market, with investors charging AI-linked companies substantially more than other highly rated borrowers. 

Spreads on debt issued by AI-related companies were hovering around 115 basis points, compared with 78 basis points across the broader investment-grade market, according to Goldman Sachs and ICE BofA data cited by Reuters. A wider spread generally means a company must pay investors a higher yield relative to comparable U.S. government debt.

“We’re being very selective in terms of how we invest within hyperscaler debt,” Colby Stilson, head of fixed income at Brown Advisory, told Reuters.

“Our degree of investment conviction needs to be very high because of the coming supply and because of the lack of visibility into that return on invested capital,” Stilson added.

The higher borrowing costs were emerging even though companies such as Meta and Google parent Alphabet maintain strong balance sheets and generate large amounts of cash. Investors instead appeared increasingly concerned about how much additional debt will hit the market as the companies raced to construct the infrastructure needed to compete in AI.

Alphabet was forced to offer investors a sizable pricing concession to complete an August bond sale, according to BNY research cited by Reuters. Some highly rated AI borrowers were even issuing bonds at spreads more commonly associated with lower-rated companies, BlackRock Deputy Chief Investment Officer for Global Fixed Income Russell Brownback told the outlet.

The contrast was pronounced outside the technology sector. Insurance broker Aon drew roughly $65 billion in orders for $13.5 billion of acquisition financing in September, while investors sought bonds from companies outside the hyperscale boom, according to Reuters.

Big Tech dramatically increased spending on the physical infrastructure required to develop and operate AI systems. Amazon, Microsoft, Alphabet and Meta were projected to spend roughly $450 billion to $500 billion on AI infrastructure in 2026, according to a Nomura investment outlook.

Big Tech raised a record $108 billion in debt in 2025, more than three times the average over the previous nine years, according to Nomura. Companies turned to special-purpose financing vehicles and asset-backed securities to fund data-center construction outside their traditional corporate borrowing.

Some institutional investors were approaching single-company exposure limits after counting debt issued through data-center financing vehicles alongside bonds issued directly by their corporate parents, Wellington Management portfolio manager Loren Moran told Reuters.

“Investors are only able to digest so much, so fast,” Thornburg Investment Management portfolio manager Lon Erickson told Reuters.

Amazon paid an additional 18 to 21 basis points of yield on the longest-dated bonds in its $25 billion July offering, while a $12 billion bond sale tied to a Meta data center in Texas was expected to yield about 7.5%, roughly 0.4 percentage points above a similar Meta deal from October 2025.