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Global tech debt hits record high over growing AI investment
Global technology companies issued a record US$428.3 billion in bonds in 2025 through early December, driven by heavy investment in AI.
Data from Dealogic shows US tech firms accounted for US$341.8 billion of the total, while European and Asian companies issued US$49.1 billion and US$33 billion, respectively.
Large tech companies, typically reliant on internal cash, are turning to debt as borrowing costs remain low and investor demand is strong.
Industry analysts say ongoing AI spending is increasing leverage, with a Reuters review of over 1,000 tech firms showing median debt-to-EBITDA ratios nearly doubled since 2020, reaching 0.4 by September.
The median operating cash flow-to-total-debt ratio dropped to a five-year low of 12.3% in Q2, before a modest recovery.
Credit markets are showing rising caution, as five-year CDS spreads for Oracle and Microsoft have both increased sharply since September.
Some analysts warn that current borrowing trends may not be sustainable if AI investments fail to deliver expected returns.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
AI capex borrowing drives new bond sales and adds leverage risk
- Tech firms sold about $428.3 billion of bonds in 2025, with a big share funding AI infrastructure instead of refinancing 1. Hyperscalers are the largest cloud platforms that run massive data centers. Leaders include Amazon Alphabet Meta Microsoft and Oracle. They raised over $90 billion in three months to build data centers plus GPUs (graphics processing units for AI training or inference) because capex needs exceed operating cash flows 2.
- Borrowing now fills gaps left by internal cash. Median debt-to-EBITDA across large tech reached about 0.4 by end-September 2025, while the operating cash flow-to-total-debt ratio hit a five-year low earlier in 2025 before a small rebound 1. Hardware ages fast, so ongoing reinvestment can lift leverage if returns lag 1.
Mid-cap technology CFOs can act before the 2026 maturity surge and a possible 2028 peak
- Corporate maturities rise from nearly $2 trillion in 2024 to nearly $3 trillion in 2026, with leveraged loans possibly peaking in 2028 (floating-rate loans to heavily indebted borrowers) 3. Many mid-cap technology firms face a maturity wall (a clustered period when large volumes of debt come due) with heavy refinancing needs 3.
- Investor demand for tech bonds stays firm, which gives a window to refinance 2026 to 2028 maturities before strain hits 1. Five-year credit default swap (CDS) spreads for Microsoft and Oracle widened since September, so CFOs can map maturity schedules to coupons to time deals and set tenors 3.
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