Despite the high-profile IPO prospects of star companies like SpaceX and OpenAI, the current focal point of the US technology capital market has shifted towards debt financing. To support the rapid expansion of AI infrastructure, the global issuance scale of technology and AI-related bonds is ballooning dramatically, projected to approach $1 trillion this year, up from $710 billion in 2025.

The combined capital expenditures and financing leases of the four tech giants—Alphabet, Amazon, Meta, and Microsoft—are expected to reach $700 billion this year to meet the epic demand for computing resources. To fill the funding gap, leading companies are intensively entering the bond market: Alphabet completed a bond issuance exceeding $30 billion this week, while Oracle announced in early February plans to raise $45 to $50 billion within the year, quickly executing a $25 billion bond sale.

According to Morgan Stanley estimates, there is an approximate $1.5 trillion funding gap in the AI infrastructure sector, with the majority expected to be filled by the debt market. Analysts warn that as tech companies' bond issuance continues to climb, the technology sector's weight in the investment-grade corporate bond index could rise from the current 9% to the teens in percentage points, exacerbating concentration risks at the index level. Simultaneously, massive supply could also increase financing costs for issuers in other sectors, creating cross-market spillover effects.

**Mega-Financing Drives Bond Market Expansion** UBS estimates that global technology and AI-related debt issuance will more than double year-over-year in 2025, reaching $710 billion, with the potential to approach $990 billion in 2026. Chris White, CEO of bond data service provider BondCliQ, noted that the corporate bond market is experiencing an "enormous supply" shock, with an unprecedented scale of expansion.

Oracle and Alphabet are leading this wave of issuance, with more tech giants signaling financing plans. Amazon filed a mixed shelf registration last week, indicating potential combined equity and debt financing. Meta's CFO Susan Li stated during an earnings call that the company would "prudently evaluate the cost-benefit of external financing to supplement cash flow and may ultimately maintain a positive net debt balance." Tesla's CFO Vaibhav Taneja also indicated following the Q4 report that, as infrastructure investments progress, the company "does not rule out seeking external funds through debt or other means."

**US IPO Market Remains Subdued** In stark contrast to the surge in debt financing, the US technology IPO market remains quiet. No prominent tech companies have filed for listings this year, with market expectations largely anchored on Elon Musk's capital maneuvers.

Musk recently merged SpaceX with AI startup xAI to form a new entity valued at $1.25 trillion. Although reports suggest SpaceX plans an independent listing by mid-2026, Ross Gerber, CEO of Gerber Kawasaki, believes Musk is more likely to integrate it with Tesla rather than take it public separately.

AI stars like OpenAI and Anthropic, each valued in the hundreds of billions, have also not finalized listing timelines. Goldman Sachs analysts project 120 US IPOs raising $160 billion this year, a significant recovery from last year's 61 deals. However, Lise Buyer, a partner at Class V Group, notes that the technology sector has yet to show clear signs of activation.

Buyer stated that increased public market volatility, exposed valuation vulnerabilities in software and AI-related sectors, coupled with geopolitical risks and weak employment data, have led many venture-backed startups to adopt a wait-and-see approach. He commented, "While the current market environment is better than the past three years, it is far from sufficient to trigger an IPO boom."

According to Professor Jay Ritter of the University of Florida, the US completed 31 tech IPOs last year, exceeding the total of the previous three years but still well below the peak of 121 deals in 2021.

**Concentration Risks and Cost Transmission Concerns** As AI infrastructure financing accelerates, the technology sector's weight in the investment-grade corporate bond index is approaching double digits. John Lloyd, Global Multi-Sector Credit Chief at Janus Henderson Investors, stated that the tech sector currently comprises about 9% of the index and is expected to rise into the teens, increasingly mirroring the structural feature where the "trillion-dollar tech club" represents about one-third of the S&P 500's market cap.

Dave Harrison Smith, Chief Investment Officer at Bailard, pointed out that this concentration presents both opportunities and risks. While the relevant companies have strong cash flows and flexible capital allocation, "the scale of required investment is staggering." BondCliQ's Chris White warned that intensive bond issuance by tech giants could crowd out demand for other issuers, forcing investors to demand higher yields, thereby raising financing costs across the market.

Although Alphabet's recent bond sale reportedly saw five times oversubscription, with yields on notes due in 2029 and 2031 priced at 3.7% and 4.1% respectively—only slightly above three-year US Treasury yields—indicating investors demanded almost no risk premium, White cautioned that "with supply continuously pouring in, demand will eventually feel the pressure." He specifically highlighted risks for companies requiring significant refinancing in the coming years, which could face substantially higher debt costs, with sectors like automakers and banks particularly vulnerable.

Lloyd added that current investment-grade credit spreads are at historically low levels, making bond allocation more challenging. Following its $20 billion dollar-denominated bond issuance, Alphabet subsequently targeted the European market for approximately $11 billion in financing. Media reports citing a credit analyst suggested that if Alphabet succeeds in offshore markets, it could prompt other hyperscale cloud service providers to follow suit, indicating that this wave of tech bond expansion has already moved beyond Wall Street's traditional demand radius.