Tech giants' $500B AI borrowing spree rattles global markets

The world's largest technology companies have begun borrowing at a scale that has no recent precedent, and the reverberations are already visible in the global financial system. From virtually nothing at the start of 2024, tech firms have raised approximately $500 billion in debt over nine months to pay for the infrastructure that powers artificial intelligence—the chips, servers, and data centers that have become the central obsession of Silicon Valley and Wall Street alike. Goldman Sachs projects this will accelerate to $1.2 trillion by 2027, a trajectory that dwarfs historical comparisons: adjusted for inflation, the AI sector is expected to borrow more in 2026 than cable operators spent building out the entire internet, or than railroad companies spent during the 19th-century expansion of American rail.

What makes this borrowing spree consequential is not merely its size but its effect on the broader financial architecture. Investors, hungry for returns, have been willing to lend to these companies at rates that would have seemed impossible for blue-chip firms just years ago. Meta now pays more than 7 percent annually on its debt; riskier cloud data center specialists have crossed above 9 percent. Yet the real disruption lies elsewhere. As investors chase higher yields from tech companies, they are withdrawing capital from US Treasury bonds—the bedrock of global finance. A bond investor who might otherwise have purchased a government security might instead buy Microsoft debt, explained Mark Malek, chief investment officer at Siebert Financial. That shift, seemingly small at the individual level, has aggregate consequences: it pushes up the interest rates the US government itself must pay to borrow.

The 10-year Treasury yield, the benchmark that sets the tone for mortgages, car loans, and countless other financial instruments worldwide, now sits above 5.3 percent—its highest level since 2002. Multiple forces are at work here. Inflation, driven partly by the war against Iran and elevated energy prices, is one. But the AI borrowing surge is another, and it is happening at precisely the moment when financial markets are already volatile. Hedge funds, which move money far faster than traditional investors like pension funds and insurers, had accumulated an unprecedented 7 percent of all circulating US government bonds by the end of 2025, though that share has since declined. Their presence amplifies market swings.

Behind the numbers lies a deeper anxiety: the possibility that the AI boom, like the dot-com bubble before it, could hit a wall. A moderate slowdown in construction, project delays, or revenue growth that falls short of expectations could trigger a shock across financial markets, Malek warned. The Bank of England's Financial Policy Committee issued a formal warning in late September that "the risk of a sharper correction persists," particularly if concerns about the pace of AI development or adoption undermine earnings forecasts. In July, when some skepticism about the AI boom surfaced, the tech-heavy Nasdaq index fell nearly 7 percent—a preview of what broader contagion might look like.

Oracle has emerged as a potential flashpoint. The cloud computing specialist carries $125 billion in debt while its cash reserves shrink every quarter. A major data center project in New Mexico faces possible delays. If Oracle stumbles on its debt obligations, Malek suggested, the consequences could ripple through the entire AI finance ecosystem. The company's troubles would not remain isolated; they could trigger contagion across an industry that has built its expansion on the assumption of continued access to cheap capital. That assumption is now being tested.