The $3 Trillion AI Data Center Build-Out Becomes All-Consuming For Debt Markets

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• Private credit loans to AI-related companies could reach $300 billion to $600 billion by 2030

  80% confidence

• Anytime there's truly innovative technology, there's usually a massive overinvestment, and then there's a correction

  80% confidence

• We've been investing in data centers for years, so this isn't new to us. But these huge megadeals with hybrid capital stack and public debt, the quantum of deal size, that's new to our market

  80% confidence

• Bond portfolios which historically traded correlated with rates and banks' performance are now going to be correlated with technology companies' performance

  80% confidence

• JPMorgan projects $300 billion of AI- and data-center-related deals every year for next five years

  80% confidence

• End markets will have to evolve and grow to handle AI data center refinancing

  80% confidence

• AI firms, traditionally reliant on internal cash flows and equity, now face higher leverage, which could amplify shocks and affect the health of financial intermediaries

  80% confidence

• Conservative estimates peg capital expenditures at $3 trillion or more in coming years for AI data center build-out

  80% confidence

• Morgan Stanley expects about $20 billion of AI-related deals in leveraged finance markets in 2026

  80% confidence

• Increasingly, there's going to be an equally large, maybe even larger, demand for financing GPUs compared to data center buildings

  80% confidence

• The vast majority of the investment is supported by companies that have very profitable existing lines of business that aren't going to go away as they're investing in this new growth area

  80% confidence

• If one $10 billion project has 10 buildings, when one building is done, we can put it into ABS or US private placement and refinance $1 billion at a time

  80% confidence

• The result is a convergence of asset classes in both public and private markets where investors will toggle to where they see the most value

  80% confidence

• Portfolio managers are going to have to decide what level of AI exposure they're willing to stomach in their portfolios

  80% confidence

• The investment-grade market has never seen this quantum of issuance to fund capex

  80% confidence

• The numbers are like nothing any of us who have been in this business for 25 years have seen

  80% confidence

• There's a view that if you can build a data center, there's so much demand that you just can't lose—it's like selling beer to sailors

  80% confidence

• JPMorgan projects more than $5 trillion of spending for data center and AI boom including related power supplies

  80% confidence

• JPMorgan projects annual data center securitization issuance could reach $30 billion to $40 billion in both 2026 and 2027, representing 7% to 10% of combined CMBS and ABS issuance

  80% confidence

• JPMorgan projects $150 billion of AI-related deals in leveraged finance over next five years

  80% confidence

• You have to turn over all avenues to make the AI data center build-out financing work

  80% confidence

• Morgan Stanley expects $250 billion to $300 billion of issuance in 2026 from hyperscalers and related joint ventures

  80% confidence

• Conservative estimates peg capital expenditures at $3 trillion or more in coming years for AI data center build-out

  80% confidence

• Chong Sin is skeptical CMBS and ABS markets can absorb mega-AI deals when debt needs refinancing, but higher yields and conservative structuring could attract more investors

  80% confidence