AI Debt Market: How Morgan Stanley Turned Credit Obligations into a Billion-Dollar Machine
The artificial intelligence industry is finding capital through an unexpected but highly effective tool—corporate bonds. According to my analysis, by 2026, the volume of "AI debt" placements will reach $570 billion, with Morgan Stanley becoming the main beneficiary of this trend.
The debt market of tech giants is experiencing a real boom. As of the end of May this year, the volume of bonds issued by AI companies amounted to $236 billion—four times more than in the same period last year. This dynamic indicates that traditional financial instruments are becoming the main driver of capital investment in the sector.
Morgan Stanley is demonstrating remarkable efficiency in this segment. In just one quarter of 2025, the bank executed bond issuance deals worth $65 billion. The six-month result is $2.3 billion in fees, significantly exceeding the $1.4 billion figure from a year earlier. Thanks to this surge, Morgan Stanley has overtaken Goldman Sachs and now trails only JPMorgan Chase.
Key players in this field include Nvidia and the Chinese neural network Kimi K3 from Moonshot AI. Funding for technological breakthroughs is provided by pension funds and insurance organizations, which operate quietly but with a huge appetite for debt securities.
How Google and Meta Are Changing the Rules of the Game
Special attention should be paid to the deal with former Bitcoin miner TeraWulf. The company repurposed its capacities for neural network needs and issued $3.2 billion in debt securities. Demand exceeded supply threefold—applications came in for $10 billion. The yield was 7.75% per annum.
The high interest in the low-rated miner's bonds is explained by Google's involvement. The tech giant guaranteed $3.2 billion in rent if operator Fluidstack stops payments. In return, Google received the right to buy 14% of TeraWulf's shares. A similar deal was struck by Cipher Mining. Shares of mining companies are growing faster than cryptocurrencies.
Meta went even further. 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 liabilities are not reflected on Meta's balance sheet.
Risks and Prospects of the AI Debt Market
Bond investors are beginning to show restraint. In February, the oversubscription of IT giants' debt exceeded supply fivefold. By July, the figure had fallen below the twofold level. At the end of 2025, the cost of insuring against Oracle's default rose to its highest since 2009. Market participants' concerns are growing alongside talk of industry overheating.
Nevertheless, infrastructure needs remain enormous. Required investments in data centers through 2028 are estimated at $2.9 trillion. IT companies' own funds cover only 50% of needs. The remaining portion will have to be raised through debt capital.
Expert opinion: The debt market is becoming the main benchmark for assessing real demand for AI. If investors start demanding a risk premium, the pace of technology adoption could slow. We are currently witnessing a classic cycle: euphoria gives way to caution, but fundamental demand for computing power remains high. The key question is whether the industry can generate sufficient profit to service this debt.