In October 2025, we wrote about the hidden debt behind the AI boom and how companies like Meta and xAI were quietly raising billions to fund ambitious AI projects. At the time, much of the attention was focused on eye-popping valuations, new AI models, and a race to build larger data centers.

The financing story received far less attention.

Eight months later, Morgan Stanley is putting numbers behind that trend, and they are staggering.

The Wall Street firm expects global AI-related debt issuance to more than double next year, reaching nearly $570 billion in 2026. The forecast offers a glimpse into a new phase of the AI race, one in which even the world’s richest technology companies are turning to bond markets to fund an unprecedented wave of spending on data centers, chips, networking equipment, and energy infrastructure.

“Morgan Stanley forecasts AI-related global debt issuance to more than double to nearly $570 ​billion in 2026, pointing to rising bond ‌supply and credit market activity as hyperscalers turn to alternative funding sources to meet massive AI-driven ​capex needs,” Reuters reported.

For years, tech giants relied heavily on strong cash flows to fund expansion. AI is changing that equation.

Morgan Stanley estimates that AI-related debt issuance had already reached nearly $236 billion as of May 31, 2026, roughly four times the level for the same period a year earlier. The surge comes as Alphabet, Amazon, Microsoft, and Meta pour hundreds of billions of dollars into AI infrastructure in a bid to secure long-term leadership in artificial intelligence.

The bank expects hyperscalers to spend roughly $700 billion on AI-related investments this year alone. That figure could climb even higher, with capital expenditures projected to surpass $1 trillion in 2027.

The scale of those investments is reshaping credit markets.

The AI Gold Rush Is Going on Credit: Morgan Stanley Sees $570 Billion in AI Debt Issuance

AI Debt Boom (Image credit: OpenAI)

According to Morgan Stanley, technology companies are increasingly looking beyond traditional funding sources and tapping debt markets to finance AI expansion. The firm expects issuance activity to accelerate during the second half of 2026 as spending plans continue to grow.

“Hyperscalers have been broadening their investor base through non-USD issuance,” the brokerage said.

Morgan Stanley added that market sentiment in the bond market is being driven less by concerns about company fundamentals and more by expectations of future supply.

“Fundamental (economic) backdrop remains strong, but for now we think (bond) price action is being mostly driven by supply expectations,” Morgan Stanley added, according to a Reuters report.

The trend extends beyond cloud giants.

The firm said financing activity for semiconductor companies is picking up across both public and private markets. Many of those deals are shifting toward shorter-term financing structures that are fully repaid over time, reflecting the industry’s need for flexibility as demand for AI chips continues to surge.

The findings highlight a reality that is becoming harder to ignore. The AI boom is no longer just a technology story. It is becoming one of the largest financing stories in modern capital markets.

Investors have spent the last two years tracking AI breakthroughs, soaring valuations, and record chip demand. The next chapter may unfold in a less visible place: the global bond market.

Morgan Stanley sits at the center of that shift. The bank advises many of the world’s largest technology companies and plays a key role in arranging debt financing across global markets. As AI infrastructure spending climbs into the trillions, firms like Morgan Stanley are well positioned to be major beneficiaries of the financing wave that supports the industry’s growth.

What began as a race to build smarter AI models is increasingly becoming a race to secure enough capital to fund them.