Global AI debt issuance to top US$500 billion in 2026: Morgan Stanley

[NEW YORK] Morgan Stanley forecasts AI-related global debt issuance to more than double to nearly US$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.

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.

SEE ALSO

Apple is handing AI power to its rival Google

Global watchdog calls for tighter controls on agentic AI in finance

Meta partners with Reliance on first India AI data centre

BizLink to buy Blackstone’s Singapore-based Interplex for US$850 million

Tata boss predicts AI agents will replace half its tech jobs

China Inc deploys ‘quiet’ layoffs as Beijing promotes AI adoption

AI salaries in Singapore rising 5 times faster than overall wages, fresh grads earn up to S$90k a year

More

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

“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. REUTERS