AI Boom Fuels Borrowing Surge as Tech Giants Raise $223 Billion Through Bonds

The artificial intelligence investment boom is driving a sharp increase in borrowing by major US technology companies, adding another layer to near-term inflationary pressures, according to Jefferies strategist Christopher Wood. 

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In his latest GREED & fear note, Wood highlighted how the race to build AI infrastructure is creating an enormous appetite for capital. The largest technology companies, commonly referred to as hyperscalers, have raised $223 billion through bond sales so far in 2026. That is more than double the $108 billion raised during the whole of 2025. 

Alphabet alone raised $29 billion last month, underscoring the scale at which technology companies are tapping debt markets to fund their AI ambitions. 

AI Investment Is Competing for Capital 

The surge in borrowing is not happening in isolation. 

According to Wood, technology companies’ growing funding requirements are increasingly competing with the US government for long-term capital. Credit spreads on bonds issued by Amazon, Alphabet and Meta have widened in recent months. 

Behind this borrowing is the physical infrastructure required to support AI development. Building out AI capabilities requires data centres, specialised chips and significant amounts of electricity all of which require substantial investment. 

While AI could eventually improve productivity and bring down costs, Wood’s assessment is that the current investment phase remains inflationary because of the amount of real resources being deployed. 

AI Capex Is Becoming a Major Driver of US Growth 

The scale of AI investment is also showing up in the broader US economy. 

AI-related capital expenditure accounted for approximately 48% of the increase in US real GDP over the four quarters through the second quarter of 2026, according to Wood. 

That contribution also creates a potential vulnerability. A slowdown in the AI investment cycle could leave the economy exposed, although Wood noted that there is currently little indication that such a slowdown is underway. 

Longer-Term AI Impact Could Look Very Different 

The longer-term picture could move in another direction. 

If AI eventually delivers substantial productivity improvements, Wood said it could reduce demand for labour and put downward pressure on wages. Labour’s share of US output has already fallen to a record low. 

For now, however, those potential effects remain further down the road. The present AI cycle continues to be defined by heavy capital expenditure and rising corporate borrowing. 

The additional demand for capital also comes as pressure persists on long-term interest rates. Wood has argued that the US Treasury is playing a larger role than the Federal Reserve in preventing yields from moving too high, while increased borrowing from technology companies makes that task more difficult. 

Against this backdrop of large government funding requirements and significant private-sector borrowing for AI, Wood continues to favour gold and gold-mining stocks over long-term US government bonds. 

For the moment, his assessment of the AI investment boom remains clear: despite its potential longer-term productivity benefits, its near-term impact continues to be inflationary.