AI Debt Issuance Rockets to $466B as Lenders Hedge Against Blowups

The AI boom is now a debt story, and the numbers are getting loud. AI-related debt issuance reached $466B in 2026, up from $101B last year — a more than fourfold jump, per @macropaperr. And the investors carrying that risk are quietly buying insurance.

Borrowing isn't cheap anymore. At least 18 data-center financing deals are now offering yields of 10% or more, a clear signal of how much lenders want in return. JPMorgan and Goldman Sachs had to dangle yields above 11% to attract buyers for a $5B AI infrastructure loan.

Banks are covering themselves too. Barclays is exploring default insurance on more than $10B of AI infrastructure debt, according to the outlet. Weekly trading in credit default protection on major technology companies has jumped past $9B, up from under $2B. Oracle's cost of insuring its debt against default has climbed above 300 basis points, while SpaceX has crossed 200.

Some banks and insurers are already bumping up against their maximum exposure to AI-related debt, the outlet reports. That's a problem, because the pipeline isn't slowing down — AI companies still need trillions of dollars to finish the data centers and infrastructure on their drawing boards.

The entire bet hinges on those companies eventually generating enough revenue to service the borrowing. If AI demand undershoots expectations, heavily indebted firms could scramble to refinance or repay what they owe. The fallout could mean stalled projects, bankruptcies, and painful losses for the banks, insurers and investors holding the paper.