Hyperscalers raise €60 billion in euro debt for AI infrastructure

Alphabet and Amazon have raised more than €60 billion in euro-denominated debt this year, tapping markets from Tokyo to London to fund the multitrillion-dollar buildout of artificial intelligence infrastructure.

"The euro market has developed enough depth to support much larger capital raises than in the past," said John Servidea, global co-head of investment grade finance at JPMorgan, which led recent deals for both hyperscalers.

Amazon's €14.5 billion eight-part transaction in March stands as the largest corporate deal in euro market history, while Alphabet set borrowing records in yen, Canadian dollars, Swiss francs and sterling. US non-financial companies have already issued more than €60 billion of euro debt this year, surpassing the prior record. Morgan Stanley estimates hyperscaler euro borrowing could reach €50 billion in 2026 alone.

The shift carries risks for bond investors. As Big Tech becomes a dominant force in European, Japanese and Swiss credit markets, those markets become more exposed to swings in sentiment around AI spending. If the buildout delivers strong returns, it reinforces credit quality — but if investors begin questioning the scale or profitability of the investment, volatility could spike.

The borrowing spree marks a structural change in how the world's most cash-rich companies fund themselves. Bank of America estimates hyperscalers have doubled the non-dollar share of their bond funding to 30 percent this year, a shift driven by deeper overseas markets and the desire to match global assets with local liabilities.

Giulio Baratta, co-head of investment-grade finance at BNP Paribas, said the companies are often keeping proceeds in the currency of issuance rather than swapping back into dollars. That gives European and Asian investors direct access to AI-linked credit in their home markets — a rarity until recently.

"If you look at the pace of investment of these companies and if you fast forward 12 months, some of these companies are already going to become among the biggest issuers globally in any currency," Baratta said.

The investor appetite is clear. Alphabet had already become the fourth-largest borrower in ICE BofA's sterling corporate bond index after just one round of issuance, and the sixth-largest in Swiss francs. Nicolas Forest, chief investment officer at Candriam, said he is buying into the euro deals specifically to build tech exposure in the European bond market.

The funding wave highlights the scale of the AI arms race among hyperscalers. Amazon, Alphabet, Microsoft and Meta are collectively expected to spend more than $300 billion on AI infrastructure this year and next, according to analyst estimates. That spending flows to chipmakers like Nvidia, data center operators and power utilities, creating a broad ecosystem of beneficiaries.

But the debt-funded nature of the buildout introduces a new variable. If AI returns disappoint, the companies that borrowed heavily could face credit downgrades, widening their bond spreads and raising future funding costs. David Zahn, head of European fixed income at Franklin Templeton, warned that if problems emerge with AI, "it will probably create more volatility."

For now, demand remains strong. The hyperscalers are using global bond markets to secure the scale, flexibility and currency mix they need for the AI race — and in doing so, they are turning overseas credit markets into a central pillar of technology funding.

This article is for informational purposes only and does not constitute investment advice.