Last Updated on July 11, 2026 by Fiza Khurram
Wall Street’s New Favorite Borrower: The Data Center
The artificial intelligence boom has always been a story about computing power. Increasingly, it is also a story about debt. Global borrowing tied to AI infrastructure is on pace to roughly double in 2026, reaching close to $570 billion, according to Morgan Stanley research. By the end of May, AI-linked issuers had already raised nearly $236 billion globally about four times the pace seen over the same stretch of 2025. For ordinary savers, the significant part is not just the size of the number, but where that debt is ending up: increasingly, inside the same investment-grade bond funds and target-date retirement portfolios that sit inside millions of 401(k) accounts.
How Hyperscale’s Are Funding the Buildout
Amazon offers perhaps the clearest illustration of the scale involved. The company has issued a record Canadian-dollar “maple bond,” raised roughly $16.9 billion in the largest euro corporate bond sale on record, and separately arranged a multibillion-dollar credit line, all to help fund roughly $200 billion in planned 2026 capital spending against a cloud backlog worth hundreds of billions of dollars. Smaller, less household-name infrastructure builders are tapping similar channels: specialist data center developers have closed multibillion-dollar bond and convertible-note deals in recent months to fund single flagship facilities.
| Financing Channel | 2025 Level | 2026 Trajectory |
| Investment-grade corporate bonds | $121B hyperscale issuance | AI-related issuance approaching $300B |
| CMBS / ABS securitization | ~$27B | Projected $30B–$40B annually (2026–2027) |
| Private credit direct lending | Near zero to $200B+ outstanding | Continued rapid growth from Blackstone, Apollo, Blue Owl, others |
| Leveraged finance deals | ~$167B total issuance (24-yr high) | ~$20B of AI-specific deals forecast |
The Rise of Private Credit and GPU-Backed Loans
Beyond public bond markets, private credit funds led by firms such as Blackstone, Blue Owl Capital, Apollo, Pimco and BlackRock have become the dominant source of external financing for AI infrastructure, with outstanding loans to AI-related companies surging from almost nothing to well over $200 billion. Some of the more exotic structures use GPUs themselves as collateral: one widely cited multibillion-dollar facility divided its financing between investment-grade and speculative-grade tranches secured against a company’s chips and customer contracts, carrying a variable interest rate that has run close to 11%.
Convertible bonds have also become a popular tool, letting companies borrow at unusually cheap coupons sometimes below 2% in exchange for giving investors the option to convert debt into equity if the stock rallies. That structure lowers near-term borrowing costs but dilutes existing shareholders if share prices climb and leaves the company on the hook to refinance if they don’t.
Why Analysts Are Watching Closely
The central worry among fixed-income strategists is not that any single company will default, but that leverage is rising faster than confirmed revenue. Sub-investment-grade “neocloud” tenants smaller specialized AI infrastructure operators introduce credit risk that didn’t exist when hyperscale’s with deep balance sheets dominated the sector. Lenders are increasingly demanding parent guarantees or hyperscale credit “wrappers” to backstop these deals, while also weighing utility counterparty risk as power delivery to new facilities faces its own delays.
Regulators are paying attention too. Dallas Federal Reserve researchers estimate that new AI-related duration supply could reach roughly $360 billion in 10-year equivalents in 2026 alone about an eighth of the duration supply coming from U.S. Treasury issuance in the same period a scale large enough to influence broader interest-rate dynamics, not just credit spreads on tech bonds.
What It Means for Ordinary Investors
Because so much of this borrowing flows through investment-grade corporate bond indexes, most people holding a diversified bond fund inside a 401(k) or ISA already have some exposure to the AI buildout, whether they realize it or not. That is not automatically alarming much of the debt is issued by companies with substantial cash flow and strong credit ratings, but it does mean that AI is no longer purely an equity-market story. If enthusiasm for AI capital spending cools, or if a wave of leveraged neocloud borrowers struggles to refinance, the tremors could show up first in credit markets rather than stock prices. For now, banks and credit-rating agencies describe the debt boom as manageable, but nearly everyone agrees it is a trend worth watching closely as 2026 progresses.