Tech Giants Squeeze Euro Bond Market with AI-Driven Debt

US technology giants are increasingly tapping Europe's bond market to finance their massive artificial intelligence investments. According to credit analysts, these companies' combined AI-related spending could reach $1 trillion by 2028.

As a result, they are becoming major players in the euro zone's bond market, accounting for almost 10% of new gross bond issuance. Amazon and Alphabet have emerged as the biggest corporate borrowers in the region so far this year, with around €40 billion ($46 billion) in outstanding bonds.

The European Central Bank has warned that the growing presence of US technology companies in the euro bond market could push up borrowing costs for other companies and governments. The analysis also questioned whether the strong credit ratings assigned to these major technology companies fully reflect the risks associated with their growing debt burdens.