Debt financing for AI-related needs — be it for data center construction or general liquidity amid aggressive spending — is accelerating in 2026, testing the limits of investor demand. July already has featured a $25 billion bond package for Amazon.com, and data center operator QTS is marketing an additional $2 billion across bonds and loans for mid-month pricing.
That's after the US high-yield bond market absorbed $31.9 billion of new AI-related bonds through July 8 this year, all but $4 billion of which backed new data centers. (The balance was issued to borrowers from the AI infrastructure/AI compute sector for refinancing or other general corporate purposes, or to borrowers where AI is the main product.) Issuance in 2025 ramped to $12.1 billion over the second half of the year, from $2 billion for the first half.
Heady volumes in high-grade bonds underscore the urgency of the buildout. IG-rated bonds from traditional hyperscalers (Amazon, Alphabet, Meta, Oracle), data center developers (including Hut 8, Beacon Point, QTS), and other AI-focused concerns (SpaceX, Nvidia, NTT, among others) reached $218 billion through July 8, blasting past an $80.5 billion 2025 total, virtually all of which was placed in the second half of the year.
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Signs of buyside indigestion are showing, particularly for AI hyperscalers. New SpaceX 6.65% 30-year bonds traded above T+200 this week, from pricing at T+175. Meta's 6.30% 2056 bonds, inked April 30 (as part of a $25 billion package), traded to its widest level yet, at T+145, or 13 bps wide of pricing, and versus trades as tight as T+120 a month ago.
In high-yield, the biggest prints this year (for Meridian Arc, Core Scientific, and Tract Capital) traded below par this week. CoreWeave's par-priced June 11 offering of 9.625% six-year senior notes slumped to 96.50 (10.42%) as the prospect of competition from one of its primary clients (Meta Platforms) dovetailed with heavy markets.
While AI activity in the institutional loan market pales against the bond volume, there are signs of borrowers stepping in, as illustrated by the launch of the $1 billion term loan B for QTS this week. Earlier this year CoreWeave, which has several existing pro rata loan facilities, issued a $3.1 billion TLB, its first such deal.
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This article originally appeared on PitchBook News