Not only in the United States, but the issuance of tech bonds is surging worldwide.

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A capital expenditure race driven by artificial intelligence is propelling global tech giants into the debt market at an unprecedented pace, reshaping the credit landscape from the US to Europe. Despite record-breaking bond issuance, analysts point out that the impact on overall credit market spreads may be fairly limited.

The US market is the first to feel this wave. Industry giants such as Meta, Alphabet, and Oracle have recently raised more than $70 billion in total. So far this year, US investment-grade tech bond issuance has surged 115% year-on-year to $211 billion, with its share of the total investment-grade market hitting a multi-year high in October.

The impact of this trend is far from over. It is predicted that if capital expenditure expectations for super-scale data centers are realized by 2026, the public investment-grade credit market may see an additional $140 billion to $175 billion in new supply, while the private market could absorb at least $100 billion to $125 billion in financing.

This wave of bond issuance is not unique to the US. Data shows that tech bond issuance is growing in sync across major global credit markets, including Europe's investment-grade and high-yield markets as well as the fast-expanding private credit sector. This suggests that financing AI infrastructure has become a common financial theme for the global tech industry.

The AI arms race drives hundreds of billions in capital expenditure

The direct driver behind the tech giants’ massive bond issuance is enormous investment in AI infrastructure. Analysts predict that the total capital expenditure of the top six super-scale data center operators alone will surge from approximately $260 billion in 2024 to nearly $600 billion in 2026.

To fund this massive spending plan, companies are actively turning to the bond market. Recent landmark deals include Meta’s $30 billion bond, Alphabet’s $24 billion, and Oracle’s $18 billion. These huge financings have driven US investment-grade tech bond issuance up 115% year-on-year to $211 billion, of which super-scale data center operators contributed $80 billion.

This round of issuance has significantly increased the weighting of the tech sector in the credit market. In October, tech bonds made up 34% of total US investment-grade bond issuance, up from 7% in June, a multi-year high. Though total investment-grade issuance this year was flat compared to the same period last year, tech sector issuance nearly doubled.

The bond issuance boom spreads from the US to the globe

Echoing the US trend, global tech companies are also ramping up bond issuance. Data shows that tech sector activity has risen sharply across major credit indices. Compared to a year ago, US high-yield tech bond issuance grew from $27 billion to $40 billion, European investment-grade from $6 billion to $35 billion, and European high-yield from $13 billion to $22 billion.

In most markets, the rolling annual average of tech bond issuance as a share of index total has exceeded the five-year average, with the US investment-grade market especially notable. At the same time, the private credit market is also an important financing channel for tech firms. As of 2025, tech issuers have raised about $120 billion through private deals, surpassing the full-year amounts of $88 billion in 2024 and $53 billion in 2023. Additionally, over $40 billion in project financing and infrastructure deals have not yet been counted in recent quarters.

However, the surge in issuance has also led to concerns about concentration risk. Data shows that the top five issuers this year account for about 50% of total US investment-grade tech bond issuance.

Credit spread impact may be limited

Although the scale of tech bond issuance is striking, historically, peaks in sector issuance are not uncommon and have not caused sustained negative market impact.

Similar issuance waves have occurred in other sectors. For example, in 2015, the healthcare sector saw heavy issuance due to Affordable Care Act reforms and M&A (such as AbbVie’s acquisition of Pharmacyclics); in 2013 and 2017, the telecom sector’s issuance surged following Verizon’s Vodafone stake purchase and AT&T’s merger with Time Warner. The tech sector has also undergone similar cycles between 2014 and 2017 with the expansion of 4G LTE networks and cloud infrastructure.

Looking back on these periods, annual sector issuance grew by an average of 83% year-on-year, but did not result in persistently poor bond performance. Data shows that in the 12 months after issuance peaks, the average sector spread to the investment-grade index actually tightened by about 2 basis points.

Based on historical experience, analysts believe the current tech bond issuance wave will have a "negligible" impact on overall investment-grade index spreads. For tech sector spreads themselves, the impact will be "limited to mild", depending on the volume, tenor, and market sentiment around AI prospects. Therefore, analysts maintain their year-end forecasts for US investment-grade spreads at 90 basis points and high-yield spreads at 325 basis points unchanged.

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