Here's Why Here's Why AI Is Fueling a Borrowing Boom
Feb 20, 2026
Skylar Montgomery Koning, Markets Live strategist at Bloomberg with a focus on credit markets and macro effects of tech cycles. She breaks down the unprecedented scale of AI borrowing. Short takes cover why AI needs massive financing, what firms are spending on, why debt is preferred over cash, and how this wave reshapes credit markets and risks.
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Scale Of AI Spending And Borrowing
- Big tech plans to spend over $4 trillion on AI by 2030, driving an unprecedented borrowing surge.
- The Dallas Fed estimates ~$300 billion of investment-grade issuance this year tied directly to AI capex.
AI Is An Energy And Infrastructure Story
- Most AI investment is physical: massive data centers, power and land demands, and heavy construction needs.
- That makes this cycle capital-intensive and different from typical software-focused tech booms.
Borrow When Debt Is Cheaper Than Equity
- Use debt to optimize capital structure when balance sheets are strong and borrowing costs are cheaper than equity.
- Consider convertibles to preserve flexibility and avoid shareholder dilution while funding long-term AI projects.