Tech Giants Flood Euro Zone Bond Market with $1 Trillion in Debt

US tech giants like Google, Amazon, and Microsoft are pouring billions into the euro zone bond market to fund their AI investments. According to a European Central Bank blog post, these hyperscalers could spend as much as $1 trillion on AI-related projects by 2028, forcing them to take on massive debt.

The firms have about €40 billion ($46 billion) of bonds outstanding in the euro zone, which is a relatively small share of the market. However, they account for nearly 10% of gross new issuance this year, with Amazon and Alphabet being the largest corporate issuers in the euro zone bond market.

The influx of debt from these tech firms may push up borrowing costs for all sectors as they accumulate more debt and take a growing share of the bond markets. This could lead to a spillover effect on sovereign and supranational bonds, making it even harder for governments to finance their projects.