investment fever in artificial intelligence; Corporate debt broke records

Tech giants have entered a new season of artificial intelligence fever by recording unprecedented records in debt creation; Where companies like Oracle, Alphabet and Meta are pouring billions of dollars into building massive data centers and the energy infrastructure needed to run them.

According to data from Moody’s Analytics, technology companies issued a record $108.7 billion in corporate bonds in the final quarter of 2025; The number is not only the highest in a season, but it is almost twice the previous quarter. This trend has continued in 2026; So that in the first two weeks of the year, 15.5 billion dollars of new bonds have been issued.

For now, investors are somewhat relieved to see the staggering cash flow of big tech companies. Over the past 20 years, giants like Google, Microsoft, Meta, Amazon, and Apple have built businesses that can be considered one of the most profitable business models in history. In the third quarter of the year, Google earned more than 100 billion dollars and its profit margin was higher than 30%. All five companies have a value of more than one trillion dollars; And AI stars like Nvidia, Broadcom and TSMC have also joined the trillion dollar club.

However, some economists and business analysts warn that the massive issuance of new bonds spreads risk throughout the economy; For a relatively new technology, it is not yet clear how profitable it will be in the end.

Mark Zandi, chief economist at Moody’s, said: “This amount of debt is too large and too sudden.” According to him, when companies finance risky projects with debt, “the entire financial system is at risk, and if the financial system is damaged, the entire economy will be damaged.”

A bond is a type of debt that companies or governments issue to raise large sums of money – usually from investment banks or private equity firms – and commit to repaying it with interest. In the past, this instrument was mostly used to finance huge infrastructure projects such as power plants, natural gas drilling or offshore wind farms; Projects with high initial cost that are expected to generate income for years. Once issued, bonds can be traded or taken as other liabilities from investment portfolios such as pension funds.

Issuing bonds to invest in artificial intelligence

Automakers, utilities and other heavy industries have historically been the biggest issuers of corporate bonds, according to Moody’s data. Analysts note that in previous waves of technology development—such as the rapid growth of Internet companies in the 1990s—companies did not have to pay such heavy infrastructure costs.

But now the situation has changed; Because the training and implementation of artificial intelligence algorithms requires an unprecedented amount of energy. Although tech companies took on more inflation-adjusted debt in 2021 than they did in 2025, interest rates were much lower then and debt financing was less expensive.

Because training and running AI models requires much more processing power and energy than previous technologies, keeping up with AI competition requires billions of dollars. Google, Microsoft, Amazon and Meta have announced in their official announcements that in 2025 alone, they will spend a total of more than 300 billion dollars on artificial intelligence data centers.

If this level of spending continues, they will likely have to incur more debt. “If these companies are so profitable, why are they going into debt?” asks venture capitalist Paul Kodrowsky. This question perfectly illustrates the enormous scale of what is happening.”

Amazon spokeswoman Amy Diaz said the proceeds from the company’s bond issue in November will be used for business investments, capital expenditures and repayment of prior debt, stressing that Amazon regularly reviews its operating plan for financial decisions.

Representatives for Alphabet, Meta and Oracle either declined to comment or did not respond to questions. Apple’s spokesperson has also referred the company’s report to the US Securities and Exchange Commission (SEC); The report stated that the proceeds from the bond issue will be used for “general corporate purposes” including share buybacks and some unspecified capital expenditures.

According to Moody’s data, among the major technology companies, Meta has used the most debt to expand its data centers in 2025. This social network company has invested heavily in artificial intelligence to become an artificial intelligence assistant for companies and ordinary users in a tight competition with Microsoft, Apple and Alphabet.

Mark Mahaney, who has been an analyst of technology companies for more than two decades and is now CEO of investment bank Evercore ISI, sees bonds as part of a strategy for tech companies to raise capital without hurting their stock prices. According to him, the issuance of bonds is a sign that managers are confident about their future or even a little proud, because the repayment of this debt requires a stable cash flow.

Oracle is also heavily increasing debt; The company issued about $25.75 billion in bonds last year to become a major provider of artificial intelligence computing power. In September, the company announced a $300 billion deal with OpenAI; The news caused a 36% jump in Oracle shares and made Larry Ellison, its founder, the richest person in the world for a while.

But in the weeks that followed, investors became concerned about Oracle’s level of debt. Citi analyst Daniel Sorid told CNBC in December that the sheer amount of capital Oracle needs is “inherently worrisome.”

The Ohio Carpenters’ Pension Plan also recently sued Oracle and several investment banks, alleging that the company did not properly disclose the amount of debt it needed.

“The sheer scale of the new debt issuance is forcing investors to re-examine whether the business model of AI is truly sustainable,” said Thomas Urano, chief investment officer at Sage Advisory in Austin.

He adds that many of the companies raising capital for AI are actually part of the infrastructure that makes today’s chatbots and AI applications possible; Infrastructures that cannot be monetized quickly.

“We’re dealing with a paradox here: strategically, AI is very attractive, but the revenue model is still being formed,” Orano says.

Meanwhile, at least one company has raised the possibility of receiving government funding to develop more data centers. Sarah Freer, OpenAI’s chief financial officer, said in November that the work would require “innovation” in funding, and that the government could play a “backer” or “guarantor” role. These statements were met with negative reactions from politicians and technology critics; The question was whether it was right for taxpayers to bear part of the risk of private companies. Freer and OpenAI CEO Sam Altman later clarified that they are not seeking federal funding for OpenAI data centers, though Altman wrote in a detailed social media post that a government-funded “national strategic reserve of computing power” could make sense.

The Trump administration has come out in full support of artificial intelligence and, brushing aside some concerns within the MAGA movement, is trying to remove regulations it says are stifling innovation. However, residents around the huge warehouses of computer chips that form the backbone of the technology, even in conservative states, have protested that the facilities suck up grid electricity, use too much water for cooling and take tax breaks from local governments. In response, Trump moderated his approach and asked technology companies to pay for electricity themselves.

“Historically, large bubbles have usually formed around real estate, technology, or government policies,” concludes Kodrowsky. “This is the first bubble in history that combines all of these.”