Investment banking giant Morgan Stanley predicts that worldwide debt financing tied to artificial intelligence projects will more than double, reaching approximately $570 billion by 2026, as major technology firms seek alternative funding methods to support enormous AI infrastructure spending.
The financial services company outlined several key trends driving this surge:
• Technology corporations that traditionally depended on robust cash generation are now increasingly seeking debt financing as their investment requirements skyrocket
• Morgan Stanley calculates that AI-linked worldwide debt financing reached approximately $236 billion by May 31, 2026, representing a four-fold increase compared to the previous year’s equivalent timeframe
• Major cloud computing companies Alphabet, Amazon, Microsoft and Meta are projected to allocate $700 billion in expenditures during the current year
• Morgan Stanley anticipates financing activity will accelerate during the latter half of 2026, with hyperscaler capital expenditures expected to exceed $1 trillion in 2027
“Hyperscalers have been broadening their investor base through non-USD issuance,” the brokerage said
“Fundamental (economic) backdrop remains strong, but for now we think (bond) price action is being mostly driven by supply expectations,” Morgan Stanley added
• Funding for semiconductor firms, which is experiencing increased activity in both public and private markets, is moving toward shorter-duration agreements that require complete repayment over time, according to Morgan Stanley
