The AI Debt Market: How Morgan Stanley is Monetizing the Billion-Dollar Neural Network Boom
The artificial intelligence industry is moving to a new level of financing. The main driver of the sector is no longer venture capital investments, but ordinary debt notes. According to our estimates, based on market data analysis, by 2026 AI technology developers will raise around $570 billion through bonds.
Giants like Nvidia and the new Chinese neural network Kimi K3 from the Moonshot AI team remain in the spotlight. However, the true drivers of this process are not so much technology companies as conservative institutional investors—pension funds and insurance organizations—operating quietly behind the scenes.
Record Volumes and Fees
Capital is moving at a record pace. By the end of May, the volume of so-called "AI debt" placed reached $236 billion—four times more than in the same period last year. Morgan Stanley, anticipating this growth, executed $65 billion worth of bond deals for AI companies in the second half of 2025. The result: $2.3 billion in fees over six months. A year ago, this figure did not exceed $1.4 billion. Thanks to this surge, Morgan Stanley has overtaken Goldman Sachs and now trails only JPMorgan Chase.
Financiers are structuring the credit obligations of IT giants and contracts for computing power. The finished bonds are eagerly bought by conservative investors, who see them as a reliable instrument.
Hidden Debts and Google Guarantees
TeraWulf clearly demonstrates how this scheme works. The former bitcoin miner repurposed its capacity for the needs of neural networks. A $3.2 billion debt offering brought in $10 billion in applications. The yield was 7.75% per annum.
The high demand for the low-rated miner's securities is explained by Google's involvement. Documents for the SEC regulator reveal the details of the agreement: the tech giant guaranteed $3.2 billion in leases if operator Fluidstack stops payments. In return, Google received the right to buy 14% of TeraWulf's shares.
Cipher Mining made a similar deal. Shares of mining companies are growing faster than cryptocurrencies.
Meta Megaprojects and Hidden Debt
Meta is choosing large-scale projects. With the assistance of Morgan Stanley, the company raised $27 billion for the Hyperion complex in Louisiana. The deal set a record for the private credit market. Partner Blue Owl's share is 80%, so the obligations do not appear on Meta's balance sheet. This is a classic example of "hidden debt," allowing IT giants to expand infrastructure without formally increasing their debt burden.
Market Demands a Risk Premium
Buyers of debt securities are showing restraint. In February, refinancing of IT giants exceeded supply by five times. By July, the ratio had fallen below the two-fold level. At the end of 2025, the cost of insurance against Oracle's default rose to its highest since 2009. Market participants' concerns are growing alongside talk of industry overheating.
Infrastructure costs continue to rise. We forecast new large-scale injections. Required investments in data centers until 2028 amount to $2.9 trillion. IT companies' own funds cover only 50% of the needs. The remaining portion will have to be raised through debt capital.
The development of railways and telecommunications in past eras relied on bonds. The debt market is financing the advancement of neural networks. Every microchip operates on credit funds. The cost of borrowing will determine the ultimate speed of technology adoption.
Analyst Comment: The AI bond market is becoming the new "carbon" for the financial system. If rates continue to rise, many projects will face refinancing problems. Investors should carefully monitor the quality of leverage, not just big names.