Big Tech raises record debt in foreign bond markets to fund AI infrastructure
Alphabet, Amazon, and other major technology companies are issuing unprecedented amounts of debt in currencies outside the U.S. dollar - from euros to yen to Swiss francs - to finance trillions of dollars in artificial intelligence infrastructure investments.
Amazon raised $16.88 billion in March through an eight-part euro deal, the largest ever in that market. Alphabet set borrowing records across multiple currencies, including the yen, Canadian dollar, Swiss franc, and sterling.
Non-financial U.S. firms have borrowed over $69.85 billion in euros this year alone, another record. Morgan Stanley expects roughly $58 billion in total debt issuance from hyperscalers - the industry term for Big Tech companies - in 2026.
Why borrow abroad?
Companies are diversifying their funding sources early as they prepare for massive capital expenditure on data centers and AI systems over the next several years. Raising money in foreign currencies also helps hedge currency risk from global operations.
Borrowing costs in some foreign markets, particularly Europe, are competitive with or cheaper than U.S. dollar rates. Spacing out debt sales across multiple currencies and markets also limits the impact on any single market.
Alphabet and Amazon are keeping proceeds in the currencies they raise rather than converting back to dollars, according to bankers involved in the deals.
Market shifts
The hyperscaler deals have transformed smaller corporate bond markets. Alphabet is now the seventh-largest borrower in the euro corporate bond index and fourth-largest in sterling, as of May 31. It ranks among the top 10 borrowers in Swiss franc and yen indexes.
Other U.S. companies are taking notice. JPMorgan's global co-head of investment-grade finance said firms beyond the hyperscalers are now examining foreign markets more seriously than before.
Investors have also shifted priorities, seeking to diversify away from dollar exposure due to geopolitical tensions and policy uncertainty. They're building technology sector exposure in international bond markets, where large tech issuers had limited presence historically.
Non-dollar issuance from hyperscalers has doubled to 30 percent of their total bond funding this year, according to Bank of America.
Risk considerations
Heavy borrowing by hyperscalers has already begun weighing on their bond performance relative to the broader U.S. corporate market. As tech issuance grows in foreign markets, those markets will face increased exposure to technology sector volatility.
Analysts warn that problems in AI development or deployment could create significant turbulence across multiple international bond markets simultaneously.
For finance professionals managing corporate debt strategy, understanding these capital-raising patterns across currencies is essential. The AI for Finance resources can help explain how artificial intelligence is reshaping financial analysis and forecasting in this environment. Those in treasury and capital planning roles may also benefit from the AI Learning Path for CFOs, which covers financial forecasting and risk analysis applicable to bond market dynamics.
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