Tech companies rack up debt, risks to fund AI ambitions

Major technology companies are taking on massive amounts of debt to fund their lofty AI ambitions, casting a shadow over investors’ once endless well of enthusiasm for AI-related stocks and sending jitters through the market.

Tech firms like Google, Meta, Microsoft and Amazon have committed hundreds of billions of dollars toward building infrastructure to power AI development in recent years, with investors largely rewarding the hefty spending.

But as these companies increasingly rely on debt to finance this expensive endeavor, the market is starting to look at some of the biggest AI plays with a wary eye.

The companies leading the data center buildout — Amazon, CoreWeave, Google, Meta, Microsoft and Oracle — are expected to spend $785 billion this year on infrastructure, according to a recent report from Moody’s Ratings. This sum is projected to grow further in 2027, nearing $1 trillion.

Despite being “among the most cash-rich companies in history,” these firms have taken on about $460 billion in debt to support their AI spending in a move that Moody’s warned could “threaten credit quality.”

“Credit metrics are still very strong for most of these companies, but a material shift in the structure of their balance sheets is becoming evident,” it added.

There has been a massive increase in bonds issued by these hyperscalers, surging from just $16.7 billion in 2024 to $193 billion so far in 2026, according to data from LSEG. This included the same companies as above, minus CoreWeave.

“I’m not shocked that Big Tech companies are coming out and tapping equity and debt markets,” Callie Cox, chief market strategist at Ritholtz Wealth Management, told The Hill.........

© The Hill