Tech giants’ AI debt tops $236B as bond markets absorb record borrowing

The AI industry's financing demands have crossed a threshold that is reshaping credit markets. As of late May 2026, total AI-related debt issuance reached approximately $236 billion — four times the amount from the same period last year — according to Morgan Stanley estimates cited in multiple reports. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 1.44% projects that AI-related debt could approach $489 billion to $500 billion by year's end, a figure that would represent roughly a third of the entire U.S. investment-grade corporate bond market's annual issuance.kucoin+2

The Borrowing Boom

The scale of borrowing has caught even Wall Street off guard. Hyperscalers have already surpassed the entire 2025 total of roughly $108 billion to $121 billion in bond issuance. Amazon Amazon.com, Inc. ↗ 3.29% leads with approximately $53 billion in debt commitments, followed by Oracle ↗ 4.21% at around $25 billion and Alphabet ↗ 0.87% at roughly $20 billion. Alphabet completed approximately $31.5 billion in global bond financing in February, including rare 100-year bonds, and issued another $25 billion in August. Amazon raised nearly $54 billion across U.S. and euro-denominated offerings in March alone.cryptobriefing+2

The reason is straightforward: capital expenditures have outgrown internal cash flows. Alphabet reported negative free cash flow of $5.9 billion in Q2 despite 24% revenue growth, while Amazon's trailing twelve-month free cash flow swung to negative $7.6 billion. The 30-year Treasury yield has risen to around 5.26% amid the deluge of long-duration supply.kucoin+2

NVIDIA's $500 Billion Financing Platform

On August 10, NVIDIA ↘ 0.52% announced partnerships with Apollo ↗ 2.91%, BlackRock ↗ 1.60%, Blackstone ↗ 1.43%, Brookfield ↗ 1.57%, Goldman Sachs, and KKR ↗ 1.55% to mobilize over $500 billion in third-party capital for AI infrastructure. NVIDIA described the arrangement as creating a new "investable asset class," with the company offering to backstop up to 25% of potential transactions. The move aims to bring pension funds, insurance capital, and private credit into AI infrastructure financing — expanding the capital pool far beyond tech company balance sheets.cnbc+3

Warning Signs in the Credit Market

Not everyone is sanguine. Bridgewater Associates' Greg Jensen warned that "we are entering a critical moment for capital". Morgan Stanley projects that $1.75 trillion of the estimated $3.2 trillion in AI infrastructure spending through 2028 will need to come from credit markets. Oracle's credit default swaps surged from roughly 40 basis points in mid-2025 to approximately 180 basis points currently, and S&P Global downgraded Oracle to BBB- in July — one notch above speculative grade. Bond investor Jeffrey Gundlach compared GPU-collateralized long-term debt to "creating a 30-year asset-backed security using bananas," questioning whether rapidly depreciating chips can support multi-decade obligations.finance.biggo+2