AI's debt binge can't last, hidden borrowing reaches $1.65T
Tech giants are accumulating massive amounts of debt to fund AI infrastructure, with hidden borrowing potentially reaching $1.65 trillion. Analysts warn that market fatigue and rising leverage could pose risks as investors grow wary of the sustainability of this spending binge.
Why it matters
The massive capital expenditure on AI could trigger broader financial instability if tech companies struggle to maintain cash flow against rising interest costs.
AI’s insatiable need for debt has so far been matched by investors’ appetite for it, but they may turn nauseous on the belly-busting volumes coming from tech giants.
The latest quarterly reports from AI hyperscalers show that their massive spending plans remain on track, with Amazon even raising its capital expenditure guidance. That means even more bond issuance is on the way after an already staggering debt orgy.
The numbers paint a picture of a borrowing binge that’s bigger—and murkier—than it looks on paper. S&P Global counts $225 billion in bonds issued by hyperscalers and related entities like Nvidia so far this year, putting them on pace for a record haul in 2026—but that’s just the visible debt. Other analyses suggest so-called hidden debt at the five U.S. tech giants has ballooned, meaning the AI boom’s true price tag is only partly reflected in the bond markets that everyone’s watching.
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