AI-Related Debt Issuance Is on Track to Approach 600 Billion Dollars in 2026, IIF Says
Debt issuance by companies linked to artificial intelligence is on track to approach 600 billion dollars in 2026 and could top 1 trillion dollars next year, the Institute of International Finance said in a note published on 8 October. On our calculation, a move from 600 billion to more than 1 trillion would be an increase of more than 66 percent in a single year.
Cash still covers the spending
The institute said cash buffers of roughly 1.1 trillion dollars cover more than 150 percent of the companies’ annual capital spending, and that traditional liquidity ratios show no immediate sign of strain from the debt build-up. On our calculation, that puts annual capital spending at less than 66.7 percent of the cash buffers.
The institute’s caution lies elsewhere: it said the revenue payoff from the investment boom remains uncertain.
Borrowing has moved well above its recent pace
Borrowing by the largest technology groups shows the change of pace. Vanguard estimates that Alphabet, Amazon, Meta Platforms, Microsoft and Oracle issued about 132 billion dollars of debt through July, against an annual average of roughly 35 billion dollars between 2020 and 2024, CNBC reported on 26 September. In the same piece, CNBC reported that broader AI-related issuance could reach 300 billion to 570 billion dollars this year.
The note appeared on the same day that Bank of England Governor Andrew Bailey named expanding exposures linked to artificial intelligence among the risks facing the financial system, in a speech in Istanbul.
Why it matters: Capital spending on artificial intelligence is now being financed with debt as well as cash. The institute’s figures show no immediate strain on liquidity; the open question it identifies is the revenue payoff, on our reading.
Outlook: Debt issuance by AI-related companies in the final quarter will show how close 2026 comes to the institute’s estimate, on our reading.
Sources: Institute of International Finance, Bank of England, CNBC, The Edge.
