AI giants’ debt tops $271 billion this year, Goldman says

Borrowing to pay for artificial intelligence has become one of the main forces in the 2026 bond market. Bond investors now give it about as much attention as the Iran war and the U.S. midterm elections. The five hyperscalers are Microsoft ↗ 2.74%, Meta ↗ 2.36%, Amazon Amazon.com, Inc. ↗ 2.06%, Alphabet ↗ 0.08% and Oracle ↗ 5.85%. Together they have issued $271 billion in debt so far this year, Goldman Sachs The Goldman Sachs Group, Inc. ↘ 0.29% credit analyst Amanda Lynam said in a client note on Tuesday, MarketWatch reported. That is about the size of New Zealand's economy.morningstar.com

Most of these companies have spent their large piles of free cash on the AI buildout, so they now depend more on borrowing. Microsoft is the exception. As a result, nearly every dollar they have raised this year costs more to secure, said Matt Brill, who heads North America investment-grade credit at Invesco ↗ 1.76%. "The competition for capital has been so fierce that everyone is paying up to borrow," he told MarketWatch.morningstar.com

A burst of new deals

Several of these companies borrowed within a few days of each other. On Monday, November 2, Oracle sold $10 billion of bonds and about $9.9 billion of stock. On the same day, Alphabet raised money in the European bond market for the second time this year, according to Bloomberg. Alphabet's €6 billion sale came soon after an earnings miss, which sent its stock down and pushed the cost of insuring its debt against default to a record high, The Star reported. Meta wanted to raise about $15 billion on Tuesday from the U.S. dollar part of a deal sold in more than one currency. Microsoft priced its own bonds late last week, MarketWatch noted.thestar.com.my+2

Borrowing costs differ widely. Oracle's 10-year bonds priced to yield about 8% and Microsoft's about 5.5%, while Meta's were expected near 6.5%, per MarketWatch. On days with big hyperscaler deals, U.S. government bonds have often lost value, a sign that companies and governments are competing for the same money. On Tuesday, the 10-year Treasury yield had its biggest one-day rise since September 28.morningstar.com

Strain spreads to riskier borrowers

The pressure is worse for smaller AI companies. CoreWeave ↗ 7.16% bonds sold earlier this year at a 9.75% rate now trade at a 15% yield, Bisnow reported. Citing The Wall Street Journal News Corp ↘ 1.23%, Bisnow said that cost has effectively locked the company out of the bond market. Last quarter, Alphabet, Meta and Amazon together spent $45.2 billion more than they brought in as free cash flow.bisnow.com

The effects reach beyond the U.S. Viktor Hjort of BNP Paribas told DW that hyperscaler debt sales in euros now compete with European governments for investors' money. Goldman expects AI hyperscalers to sell $420 billion of new bonds next year.dw.com

"AI's role in the bond market is becoming close to how geopolitical headlines affected yields earlier this year — unscheduled, sometimes closer to rumor than fact," FHN Financial strategist Will Compernolle wrote.morningstar.com