As AI-driven optimism pushes global equities to record highs, the infrastructure behind AI — data centres — is increasingly being financed with debt, raising new questions about credit risk and financial stability.
According to UBS, AI data-centre and project financing has surged to $125B in 2025, up sharply from $15B in 2024, with credit markets expected to play a pivotal role into 2026.
The Bank of England has already warned that rising leverage in AI infrastructure could amplify systemic risk if valuations correct.
Here are five key debt pressure points investors are watching:
1️⃣ Oracle: Credit Stress Signals Rising
- Oracle shares are down ~42% from September highs
- Heavy AI capex has pushed CDS spreads to their highest level since 2009
- Moody’s flagged risks in new contracts (no downgrade yet)
2️⃣ Investment-Grade AI Borrowing Surges
- Mega deals: Oracle $18B, Meta $30B, Alphabet also tapped markets
- AI-linked issuers now make up 14% of JPMorgan’s IG index, surpassing U.S. banks
- Still part of a much larger $1.6T IG issuance expected in 2025
3️⃣ High-Yield AI Debt Hits Records
- Junk tech bond issuance is at all-time highs
- Some managers remain cautious, citing untested delivery risk
“This should be priced like equity, not debt,” said Mirabaud’s Al Cattermole
4️⃣ Private Credit Steps In
- Private credit AI loans may have nearly doubled YoY (UBS)
- Morgan Stanley estimates private credit could fund 50%+ of the $1.5T data-centre buildout through 2028
5️⃣ ABS: A Quiet Comeback
- Digital infrastructure ABS now $82B (5% of U.S. ABS market)
- Data centres back 63% of that segment
- Expected new supply: $50–60B in 2026
- Still watched cautiously due to post-2008 legacy risks
🔎 Bottom Line
AI’s growth is no longer just an equity story — it is increasingly a credit market story.
The opportunity is real, but so is the risk if demand, timelines, or valuations disappoint.