AI infrastructure spending surge could crowd out borrowers as $830 billion capex boom competes for capital, though credit markets remain resilient so far.
Capital expenditures by companies building out AI infrastructure are anticipated to more than double this year and increase further through 2030. This trend doesn’t bode well for other companies looking to raise or refinance capital.
Chatham Financial estimates that 2026 capital expenditure for AI infrastructure will be over $830 billion, Amol Dhargalkar, the firm’s managing partner, said in a semiannual market update issued last month. That comes to approximately half the volume of last year’s US investment-grade bond market and two-thirds of leveraged loans, and significantly more than the high-yield bond market.
“The big question is whether it will have any crowding-out effect [on other issuers], if we’re going to spend an estimated $7 trillion over less than half a decade,” Dhargalkar said, noting the effect would be global given data center projects in Europe, Asia, and especially the Middle East.
Relatively tight credit spreads globally indicate little impact so far. And any initial impact would be marginal, he added, should asset managers favor bonds issued by giant hyperscalers over those issued by more obscure, high-yield industrial companies: “There’s so much money flowing into AI, there could be more confidence in what their risk-adjusted returns will be.”
Investment-grade companies typically sail through debt offerings, but they, too, could be impacted as they compete for the same investors as Microsoft, Google, Amazon, and other hyperscalers with oodles of cash and top ratings.
Actual capital expenditure by these companies is likely to be lower than estimated, Dhargalkar argued, given limited resources to build data centers and likely inflationary effects from the Iran war. “But at some fundamental level,” he said, “there’s not enough money for everything, and you certainly don’t want to get caught out on the wrong side of that transition.”
Chatham, which advises companies globally on hedging financial risk, is seeing companies lean toward pursuing deals sooner rather than later, not because of AI concerns but because rates are currently stable and credit spreads tight.
Companies planning to issue, for example, a10-year bond in two years can typically hedge the 10-year US Treasury, over which the bond will be priced. However, Dhargalkar added, hedging the spread is difficult for investment-grade companies and even harder for riskier firms.
