'AI Investment Boom' Continues... "U.S. Corporate Bond Issuance Expected to Hit Record High Next Year"

AI-Related Bonds Expected to Reach $400 Billion

Bloomberg News reported on December 23 (local time) that, fueled by the spread of artificial intelligence (AI) investments, the volume of corporate bond issuances by U.S. companies is expected to reach an all-time high in 2026.

Reuters Yonhap News

According to Bloomberg News, Morgan Stanley, a U.S. investment bank, forecasts that $2.25 trillion worth of investment-grade corporate bonds will be issued in the United States in 2026. This represents an increase of about 25% compared to this year's issuance volume of $1.8 trillion. In particular, Morgan Stanley predicts that bonds related to AI will amount to $400 billion.

According to Bloomberg Intelligence, corporate spending on AI, cloud computing, and data center construction is projected to reach $3 trillion by around 2029. Morgan Stanley especially expects that companies with large-scale cloud AI infrastructure, such as Alphabet, Amazon, and Meta, will have the capacity to issue $700 billion in corporate bonds.

In addition to the AI investment boom, demand for mergers and acquisitions (M&A) is also cited as a key driver behind the increase in corporate bond issuances. Major deals expected to be financed through corporate bonds include the Warner Bros. Discovery acquisition battle, the spinoff of Kraft Heinz's North American grocery business, and AT&T's acquisition of Lumen Technologies' high-speed internet division.

However, Bloomberg News pointed out that even if corporate bond issuance increases to this extent, it remains uncertain whether market demand will keep up. North American financial investment firm TD Securities predicts that the spread (additional yield) on U.S. corporate bonds will widen from 0.75-0.85 percentage points this year to 1-1.11 percentage points in 2026. The spread refers to the extra yield that compensates for the risk of the bond. Bloomberg News stated, "As concerns over an AI bubble become harder to ignore, investors are likely to demand a higher spread."