Surge in AI Debt Financing in the U.S. May Draw Market Attention in September

On August 20, the U.S. Treasury recently alleviated pressure in the Treasury market by expanding its long-term bond repurchase program, but a wave of corporate debt financing driven by artificial intelligence infrastructure development is heating up.

As investments in data centers, high-end chips, and AI services continue to expand, tech giants are ramping up their bond financing efforts. The market anticipates that U.S. investment-grade corporate bond issuance will peak after Labor Day in September, potentially reaching $200 billion.

Data shows that since 2026, the issuance of U.S. investment-grade corporate bonds has increased by 38% year-on-year, with the total issuance expected to reach a record $2.1 trillion for the year, much of which is related to AI capital expenditures.

In recent years, tech giants have primarily relied on cash flow to support their AI initiatives, but as competition in the industry intensifies, the long-term capital needs for data centers, power, and computing equipment are rapidly expanding, leading companies to increasingly depend on the bond market for financing.

Market attention has shifted from "Can AI generate profits?" to "Can massive infrastructure investments yield sufficient returns?" Some investors are concerned that the expansion of AI debt is altering the allocation of funds in the fixed income market, potentially creating new competition for funding between tech corporate bonds and U.S. Treasuries.

The global head of fixed income at an asset management firm stated that the current supply of AI-related bonds is "approaching the limit that would not disrupt the market."

Analysts point out that if future AI revenue growth cannot cover the substantial investments in data centers and chip procurement, some capital expenditures may face the risk of insufficient returns. The market is also beginning to compare the current AI financing boom to the internet bubble of the early 2000s, cautioning that the pace of capital investment may exceed the speed at which business models can deliver results.

Although the Treasury's repurchase program helps improve liquidity in the Treasury market, it cannot change the trend of simultaneous growth in government debt and corporate financing needs. The large-scale corporate bond issuance in September may become a new stress test for the Treasury market.