Shafaqna English– US tech giants like Google, Amazon, and Microsoft are flooding the euro zone bond market to finance massive AI investments, potentially crowding out other borrowers and driving up financing costs for companies and even governments, according to a European Central Bank blog post.
Credit analysts estimate these hyperscalers could spend up to $1 trillion on AI-related investments by 2028, prompting them to tap global debt markets. Although their outstanding euro zone bonds total around €40 billion ($46 billion)—a relatively small share of the market—they now account for nearly 10% of gross new issuance, with Amazon and Alphabet leading as the top corporate issuers this year.
The blog warned that as big tech firms accumulate debt and increase their market share, they could push up borrowing costs across all sectors, with potential spillover effects on sovereign and supranational bonds. The sheer volume of new issuance could test investor appetite, and expectations of further supply may amplify upward pressure on yields, particularly given limits on how much debt investors can absorb.
Source: Reuters