Tech companies are raising hundreds of billions of dollars through stock sales, bond offerings, and private credit to finance the artificial-intelligence infrastructure build-out, with Alphabet’s announcement that it would raise $85 billion of equity serving as the latest and largest example of a fundraising wave spanning equity and debt markets worldwide.
The so-called AI hyperscalers — Alphabet, Amazon, Meta, Microsoft, and Oracle — have issued $159 billion of bonds globally this year, up from $108 billion in all of last year and $17 billion in 2024, according to data from Dealogic reported by The Wall Street Journal. Data-center developers have raised additional billions in the high-yield bond market, while upstart AI cloud companies are borrowing from banks and private-credit firms to fund purchases of chips.
Spending on data centers and other AI infrastructure by just four major tech companies this year is expected to total more than $670 billion — a larger investment as a share of the economy than the railroad expansion of the 1850s, the Journal reported. That scale has raised concerns among some analysts that Wall Street is inflating a bubble, particularly around questions of how profitable it will be to maintain products such as OpenAI’s ChatGPT, Alphabet’s Gemini, and Anthropic’s Claude, which are at the heart of the investment boom.
“Overbuild risk isn’t going away,” said Jordan Chalfin, a senior analyst at research firm CreditSights, adding that the risk is generally reflected in hyperscaler bond spreads.
Despite those warnings, investor demand has remained strong. The extra return investors demand for holding U.S. companies’ bonds instead of ultrasafe Treasurys is hovering near multidecade lows, reflecting confidence in the creditworthiness of the tech giants involved. Tech stocks in the S&P 500 are up 31% this quarter, with many citing encouraging fundamentals, such as businesses’ surging spending on AI tools.
“I think there’s been a few signals that have become more positive for the AI infrastructure build-out,” said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. “That’s helped give investors more confidence in the return prospects for the investment.”
Supporting that optimism, Anthropic is poised to double its revenue to $10.9 billion in the second quarter, the Journal reported, at least temporarily exceeding the hefty cost of training and running its models. OpenAI and Anthropic have each raised more than $100 billion in venture capital financing. SpaceX, Anthropic, and OpenAI are poised for public listings that could make this year the biggest ever for money raised through initial public offerings.
MSI previously reported that major AI companies are racing toward blockbuster IPOs amid surging cash needs, and that Alphabet had announced plans for an $80 billion equity raise to fund AI infrastructure expansion.
The borrowing has gone international this year. Alphabet has issued bonds not only in U.S. dollars, but also in Canadian dollars, Japanese yen, euros, Swiss francs, and British pounds — the currency in which it issued a rare 100-year bond. The company is also borrowing $1 billion for energy financing in the California municipal-bond market, according to a preliminary prospectus filed last week. Amazon was poised to issue Canadian-dollar bonds on Monday after issuing bonds in U.S. dollars, euros, and Swiss francs earlier in the year.
While big tech’s borrowing binge has drawn comparisons to previous credit booms that went bust, a key difference, analysts say, is that many of the companies involved remain hugely profitable. Reflecting that strength, the extra yield investors demand to hold 10-year Alphabet, Amazon, and Microsoft bonds over Treasurys is still below that of the average investment-grade corporate bond. The spread on Meta bonds is slightly above that average.
There are exceptions. Oracle, which has issued $43 billion of bonds since last September, is projected to burn tens of billions of dollars over the next several years as it transforms from a software company into a cloud-computing giant, leasing clusters of advanced chips to OpenAI and others. Though rated investment-grade, its bonds trade more in line with speculative-grade debt, according to CreditSights.
Investor sentiment has improved even more sharply for the speculative-grade CoreWeave, a former bitcoin miner turned AI cloud-computing provider. At one point last year, the company’s ability to borrow in the bond market was in question after a steep selloff in its shares and bonds following news of data-center construction delays. This year, CoreWeave’s stock has rallied 43% and spreads on its bonds have tightened by around 4 percentage points, enabling the company to raise more than $20 billion through sales of stock and debt in 2026.
Tech shares rebounded Monday, lifting the Nasdaq composite to a 0.9% gain. The S&P 500 added 0.3%, while the Dow Jones Industrial Average slipped 0.2%, or 81 points.
Even some skeptical investors acknowledge that betting against the AI boom at this stage appears premature. Ayako Yoshioka, senior investment strategist at Wealth Enhancement, said it is eventually likely that companies will build too much AI infrastructure and stock prices will fall. Now, though, she said, “there’s still time to invest because this build-out, the scale of it, is just so large.”