Major technology companies are aggressively issuing bonds to raise capital for investments in artificial intelligence, and investors appear willing to participate.

Although the market expresses concern over these firms' substantial spending on AI, bond investors, often considered "smart money," are currently displaying greater composure.

Technology companies require massive funding to acquire AI infrastructure, primarily energy-intensive data centers, to ensure sufficient computing power.

This year, leading cloud service providers are projected to spend over $600 billion on related expenditures. Analysts at Morgan Stanley estimated last summer that these companies face a $1.5 trillion funding gap to meet their capital expenditure requirements.

Even highly profitable tech firms with strong cash flows and stable operations are turning to credit markets to finance their spending.

According to PitchBook data, within less than two months of the new year, the five leading cloud providers—Alphabet, Amazon, Meta, Microsoft, and Oracle—have already issued $45 billion in bonds in the United States. This amount is close to half of their total issuance for the entire year of 2025.

This scale surpasses their bond issuance for any full year since 2011.

Overseas investors are also showing strong demand for bonds from technology companies.

A recent report indicated that Alphabet raised $32 billion through bonds denominated in British pounds and Swiss francs.

**Overall Landscape** The enthusiastic purchase of high-grade bonds from these companies by bond investors indicates strong confidence in their credit quality, particularly in Alphabet.

The spread on Alphabet's bonds issued in the US last week was extremely narrow compared to US Treasuries, at less than 1 percentage point.

Data shows that even Alphabet's century bonds were highly sought after, with an issuance rate only 1.2 percentage points higher than the UK's 10-year government bond.

In essence, the bond market is treating these technology companies as entities with safety comparable to sovereign nations.

It remains entirely unclear which companies, if any, will ultimately emerge victorious in the current AI race.

Even for the winners, it is uncertain whether their new AI businesses will generate profit margins as substantial and consistent as their previous ventures.

Ashok Bhatia, Chief Investment Officer and Head of Global Fixed Income at Neuberger Berman, questioned, "Will these leading cloud providers truly be the ultimate economic winners?"

Bhatia pointed out that companies that borrowed money to drill for oil during the shale gas boom were not the ultimate economic winners.

"The beneficiaries were everyone else."

The stock market presents a different picture. While credit markets remain calm and continue to provide ample funding to these companies, equity markets have experienced a slight pullback.

The stock prices of the aforementioned five leading cloud providers have all declined since the start of the year.