Morgan Stanley Warns of $1.5 Trillion AI Financing Debt Surge That Could Strain Credit Markets

Morgan Stanley forecasts a $1.5 trillion financing gap for AI buildout to be filled predominantly through corporate debt markets. Big Tech issued $121 billion in bonds in 2025, up from $40 billion in 2020. The debt surge mirrors early-2000s telecom—a cautionary precedent—though hyperscalers' stronger cash flows and credit profiles differ markedly. For fixed-income investors, the supply pressure and spread dynamics warrant careful scrutiny.