Big Tech Floods Eurozone Bond Market with AI Investment

European Central Bank blog authors warn that U.S. tech giants are flooding the eurozone bond market, potentially crowding out other borrowers and pushing up financing costs.

The big tech companies, often referred to as hyperscalers, have about €40 billion ($46 billion) of bonds outstanding in the euro zone and account for nearly 10% of gross new issuance. Amazon and Alphabet have been the largest corporate issuers in the euro zone bond market this year.

According to credit analysts, these firms could spend as much as $1 trillion on AI-related investments by 2028, forcing them to tap debt markets around the world. This could test investor appetite for new debt issuance and potentially amplify borrowing costs across the market.