Major US technology companies such as Google, Amazon and Microsoft — often referred to as hyperscalers — could spend as much as $1 trillion on artificial intelligence-related investments by 2028, according to credit analysts, a level of spending that is forcing them to tap debt markets around the world.

The projected surge in AI capital expenditure has significant implications for the European corporate bond market. If hyperscalers issue large volumes of euro-denominated debt to finance data centers, chips and AI infrastructure, they could crowd out other companies seeking to borrow, credit analysts warn, while also adding to overall credit risk in the market.

Hyperscalers have historically been among the most cash-rich companies in the world, and their debt has traditionally carried high credit ratings. For US issuers, the euro bond market has long served as a way to diversify funding sources and reach a different base of investors, and highly rated American borrowers have been regular — and often large — issuers of euro-denominated debt. However, the scale of spending required for AI infrastructure — including data centers, specialized semiconductors and energy capacity — has begun to change their financing patterns, with increased reliance on bond issuance both in the United States and abroad.

The concern for the euro bond market is one of supply and investor appetite: if a small number of highly rated technology giants absorb a disproportionate share of investor demand, other corporate borrowers — particularly lower-rated or smaller issuers — may face higher borrowing costs or reduced access to capital. This dynamic matters beyond bond desks, because corporate debt is a key channel through which companies finance expansion, refinancing and everyday operations, so shifts in the cost and availability of that funding can ripple across the wider European economy.

The trend reflects the broader global race to build AI computing capacity, in which the largest technology firms have committed to multi-year investment programs running into hundreds of billions of dollars. For market watchers, the signals to track include the pace of euro-denominated issuance by US tech issuers, borrowing spreads for lower-rated European corporates, and any rating-agency commentary on how sustained AI capital spending affects the credit profiles of the hyperscalers themselves.