Citadel Securities says AI chip spending may fuel $500B debt
AI chip purchasing is getting so big that Citadel Securities says more than $500 billion in new debt could be issued by 2028 to fund these purchases.
Jeff Eason, its head investment-grade desk analyst, told Bloomberg this debt might make up more than 5% of the Bloomberg US high-grade index.
Most loans will last three to five years, about as long as the chips themselves stay useful.
Jeff Eason calls AI debt unprecedented
Eason called this level of debt "unprecedented" and thinks it might even be underestimated.
The rush for AI chips will probably shift money away from other industries like tech and media.
Globally, AI-related debt has reached roughly $570 billion, with giants like Amazon, Microsoft, and Google expanding data centers fast.
Even startups are jumping in, Anthropic raised funds this year just to buy Google's TPU chips.