“We’re seeing a fundamental change in how Big Tech finances its growth,” said a credit analyst at Goldman Sachs. The five biggest US data-center giants Microsoft, Alphabet, Amazon, Meta, and Oracle have collectively taken on about $350 billion in debt over the past five years as their AI ambitions accelerate. This massive borrowing spree has pushed their annual interest expenses past $10 billion, more than double the 2019 level, showing that cheap capital days might be behind them.

Goldman Sachs expects AI-related corporate bond issuances to hit roughly $141 billion in 2025, driven by major deals from Meta, Alphabet, and Oracle. Meta’s latest $12.5 billion bond sale for a Texas data center brought noticeably higher yields compared to earlier offerings this year. Meanwhile, Oracle’s credit default swap spreads have widened, signaling increased risk perception. UBS forecasts new tech debt supply could surge to $900 billion next year, while Morgan Stanley and JPMorgan estimate AI infrastructure borrowing could top $1.5 trillion by 2028.

The scale of capital poured into AI is staggering. Hyperscalers alone might spend around $490 billion on infrastructure in 2026, a figure revised upward from previous projections. Combined capital expenditures for Microsoft, Amazon, Alphabet, and Meta are expected to approach $725 billion soon. But this surge in debt also raises red flags. Oracle’s wider credit spreads reflect investor concerns about the company’s smaller revenue base amid heavy borrowing to keep pace in the AI race. For bond market participants, the flood of tech debt is creating pressure on yields, as supply starts to outpace demand.

This shift from cash-rich to debt-heavy growth strategies is reshaping the tech credit landscape. The rising cost of borrowing and market skepticism could influence how these companies approach future AI investments. Similar dynamics are seen across sectors, with interest rate policies playing a key role in financing costs.

This material is for informational purposes only and does not constitute financial advice.