AI's infrastructure boom is increasingly being built on debt, not just Big Tech's own cash

[CosmicRay17]

Multiple outlets running regurgitated stories about AI infrastructure increasingly getting financed through debt rather than purely company cash and equity, a theme the FT headline appears to be part of alongside recent WSJ and Fortune coverage of the same underlying trend.

Moody's chief economist Mark Zandi has flagged that the ten largest AI companies. Including Meta, Amazon, Nvidia and Alphabet, are on pace to issue more than $120 billion in bonds this year alone, with big tech now issuing more debt, adjusted for inflation, than even during the late 1990s dot com boom, a period usually remembered as the high water mark for speculative tech financing.

The genuinely important structural difference from that earlier era is that dot com companies were mostly funded through stock and venture capital rather than debt. Meaning today's AI buildout carries meaningfully more downside risk if revenue disappoints, since debt has to be repaid regardless of how the underlying business actually performs, unlike equity which simply loses value alongside the company.

Oracle's debt load specifically is projected to roughly double to more than $290 billion by fiscal 2028 according to Morgan Stanley. And analysts describe this pattern as a genuine overbuild risk, since that kind of speculative infrastructure investment is generally considered safer when financed through equity rather than debt, precisely because equity absorbs a shortfall in a way debt structurally cannot.

Zandi's own warning is measured rather than alarmist. This aggressive borrowing likely won't be what brings these companies down directly, but if stock prices eventually suffer while these debt loads remain, the resulting strain could become a genuine and mounting threat to the broader financial system, a framing that connects directly to the separate reporting on trillions in additional off-balance-sheet commitments that don't even show up in these headline bond issuance figures at all

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