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

The world's largest technology companies have begun borrowing money at a scale that has no recent precedent, and the ripples are already visible across global financial markets. In the nine months since January, Google, Meta, Amazon, Microsoft and their peers have taken on roughly $500 billion in debt to pay for the chips, servers, and data centers that power artificial intelligence systems. This represents a stunning acceleration from 2024, when tech sector borrowing for AI was negligible. Goldman Sachs now forecasts that borrowing will nearly triple to $1.2 trillion in 2027.

The sheer volume has reshaped the landscape of corporate finance. Two years ago, AI-related borrowing accounted for just 4 percent of all corporate bond issuance. Today it represents 25 percent. To put the scale in perspective: the AI sector is expected to borrow more this year than US cable operators spent to build out the entire internet, or than railroad companies spent during the 19th-century rail boom. "This is not something that we've seen before," said Chris Della Fave, senior vice president at Post Oak Group, a fundraising advisory firm.

Investors have been willing to lend, but at a cost. Meta, one of the world's most established companies, now has to offer returns above 7 percent annually to attract bond buyers. Riskier cloud data center specialists are paying above 9 percent. These are rates that would have been unthinkable for such established firms just a few years ago. The market is pricing in genuine uncertainty about whether these massive infrastructure bets will pay off.

The consequences extend far beyond the tech sector itself. When investors choose to buy Microsoft bonds instead of US Treasury bonds, they are redirecting capital away from the US government. This shift pushes up the interest rates Washington must pay to borrow money. The 10-year Treasury bond rate—the benchmark that influences everything from mortgage rates to car loans and is widely considered the most important number in global finance—now sits above 5.30 percent, its highest level since 2002. Other forces are at work too: inflation driven by the war against Iran and elevated energy prices. But analysts increasingly point to the AI borrowing surge as a significant contributor to rising rates.

The situation has been amplified by the behavior of hedge funds, which have accumulated unprecedented holdings of US government bonds. At the end of 2025, hedge funds held 7 percent of all Treasury bonds in circulation—a historically high share. Unlike insurance companies and pension funds, which move money cautiously, hedge funds can shift their positions rapidly. This speed creates volatility. Even if the geopolitical situation stabilized and oil prices fell, Della Fave said, the AI debt dynamic would likely keep Treasury yields elevated. "I wouldn't expect the yields to dramatically reduce, to be honest, because of this influence of the AI debt situation."

Whatever the near-term trajectory, some analysts are asking whether the AI investment boom can sustain itself. The dot-com bubble of 2000 offers a cautionary reference point. A moderate slowdown in construction, delays on major projects, or revenue growth that falls short of expectations could trigger a sharp market correction, according to Mark Malek, chief investment officer at Siebert Financial. The Bank of England's Financial Policy Committee warned in late September that "the risk of a sharper correction persists," particularly if concerns about AI development or adoption begin to weigh on corporate earnings. In July, when some skepticism about the AI boom surfaced, the tech-heavy Nasdaq index fell nearly 7 percent.

Oracle has emerged as a potential flashpoint. The cloud computing company carries $125 billion in debt while its cash reserves shrink each quarter. A major data center project in New Mexico faces possible delays. If Oracle encounters serious difficulty servicing its debt, Malek warned, "trouble with its debt could trigger contagion" across the entire AI financing ecosystem. The company has become a bellwether—a test of whether the financial system can absorb the weight of this unprecedented borrowing spree, or whether cracks will begin to show.