Goldman Sachs says tech giants will borrow $400B for AI
Big US tech names like Amazon, Microsoft, Alphabet, Meta, and Oracle are gearing up to borrow another $400 billion in 2027, just to build out their artificial intelligence infrastructure.
According to Goldman Sachs, this marks a big shift: instead of just using their own internal cash flow, these companies are now turning to debt in a race to stay ahead in the AI game.
Tech debt lifts corporate bond spreads
All this borrowing is shaking up the corporate bond market. Investors now have more high-quality options besides government bonds, and bond spreads are ticking up as a result.
While tech debt is not moving Treasury yields much yet, those are still driven by Federal Reserve policy and government deficits; it is clear that heavy investment in AI is changing how money flows through the economy.
Expect this trend to stick around as tech giants keep pushing for an edge in new technologies.