Big Tech’s trillion-dollar AI boom isn’t powered by cash; it’s powered by debt. The world’s largest tech firms are piling on billions in debt to fund the infrastructure race of the decade.
The $1 Trillion Echo-Chamber: 7 Giants, 1 Debt-Fueled AI Boom
The AI Boom of 2025 didn’t just appear out of thin air, it was built, branded, and broadcast.
It all started in September, when OpenAI, Nvidia, Microsoft, Oracle, AMD, Meta, and CoreWeave began rolling out their trillion-dollar infrastructure deals. Within days, headlines turned technical supply agreements into talk of a “new industrial revolution.”
Then came Bloomberg’s viral piece,“OpenAI, Nvidia Fuel $1 Trillion AI Market With Circular Deals”. The story revealed a closed loop of trillion-dollar commitments, in which tech giants were financing and buying from one another.
CNBC, Reuters and Financial Times followed with deep dives into “AI’s trillion-dollar web,” “circular deals,” and “the next industrial revolution.”
and Wall Street analysts began dubbing it the “second AI rally”, this time powered by debt, circular financing, and cross-ownership, not pure innovation.
That is why the spotlight shifted: from innovation to debt, from breakthroughs to balance sheets. That’s where this story begins, tracing how the AI boom was engineered, financed, and amplified into one of the most expensive media spectacles in tech history.
So, back to the report, it revealed that OpenAI, Nvidia, AMD, Oracle, Microsoft, and CoreWeave are locked in a trillion-dollar loop, funding one another to finance the same AI expansion they’re all selling to each other.
At the center sits OpenAI, spending hundreds of billions on Nvidia GPUs, Oracle cloud infrastructure, and AMD chips, financed by the very same companies it’s buying from. Nvidia, in turn, invests back into OpenAI while selling to its rivals and partners. Oracle builds OpenAI’s data centres using Nvidia hardware. Microsoft fuels the ecosystem with capital, and depends on it for Azure AI.
When Bloomberg visualized this tangled web, the message was clear: the AI boom is being built on credit, circular spending, and inflated valuations. It’s not pure innovation, it’s a self-reinforcing cycle of debt-driven expansion that sustains the illusion of exponential growth.
The AI Gold Rush Has a New Currency: Debt
AI is reshaping Wall Street, not just through stock rallies, but through a massive wave of borrowing. Tech giants from Oracle to Meta, Microsoft, and Alphabet are quietly transforming the credit market as they race to finance data centres, GPU clusters, and energy-hungry supercomputers.
In just September and October 2025, AI-linked Big Tech companies issued $75 billion in investment-grade debt, according to Bank of America, more than double the sector’s average annual issuance over the last decade. Oracle alone has raised $26 billion this year, while Meta borrowed $30 billion through complex private credit deals.
The message is clear: the AI arms race is being financed by the bond market.
Related: Is Big Tech’s AI Spending Creating a Bubble?
Oracle’s Billion-Dollar Bet
Few companies embody the AI-debt boom like Oracle. Once seen as a software legacy firm, Oracle has rebranded itself as the infrastructure backbone of OpenAI and the broader AI economy. But this transformation comes at a steep price.
- The company’s long-term debt now tops $82 billion, and analysts at KeyBanc estimate it may need to borrow $25 billion a year for the next four years.
- Oracle’s credit default swaps — a measure of perceived default risk — have jumped sharply, even as its stock surged 54% this year.
- Its latest $18 billion bond sale drew $88 billion in orders, making it the second-largest investment-grade deal of 2025, behind only Mars’s $26 billion acquisition loan.
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The paradox? Investors are lining up to lend money despite warnings of an overbuild risk. As Barclays analysts put it, “AI-related tech debt issuance is the single biggest variable shaping credit market supply in 2026.”
Meta’s AI Bill Keeps Growing
Meta’s ambitions are just as staggering, and controversial. After spending billions to train its Llama models and build AI data centers, the company now faces investor anxiety over spiraling expenses.
In Q3 2025, Meta’s expenses rose 32% year-over-year, and its capex guidance for 2026 was raised again. Its stock fell 11% after earnings, despite solid results.
JPMorgan analysts warned that Meta’s costs are “outsized relative to Google and Amazon,” since it lacks a cloud division to immediately monetize AI compute.
To offset the spending shock, Meta has reportedly tapped Blue Owl Capital for a $27 billion private financing deal, structured to keep the debt off its books. Such creative financing echoes the pre-2008 era — profitable for now, but opaque and potentially risky.
Private Credit and ‘Junk’ Debt Join the AI Race
Beyond Big Tech, smaller AI players are borrowing aggressively too.
- CoreWeave raised $2 billion in high-yield bonds in May, backed by Nvidia.
- TeraWulf, a bitcoin miner turned AI data center operator, issued $3.2 billion in junk debt rated BB– by S&P.
- Private credit funds — non-bank lenders like Apollo and Blackstone — are now supplying half of the $1.5 trillion needed for global data center construction through 2028, UBS estimates.
Morgan Stanley warns that private credit’s growing role could amplify financial stress during downturns, given the illiquidity of these loans
More about: Is the AI Boom a Revolution — or the Next Big Bubble? Here’s What the World’s Top CEOs Are Saying
AI ABS: Wall Street’s Next Frontier
Even securitization — the same mechanism behind the 2008 mortgage meltdown — is returning under an AI twist.
Banks are packaging data center lease payments and infrastructure loans into asset-backed securities (ABS) for investors hungry for yield.
The AI-backed ABS market, worth $80 billion in 2024, has expanded eightfold in five years and could hit $115 billion next year, according to BofA. Roughly 64% of that market is now tied to data center construction.
It’s standard practice — but the speed and scale are drawing uneasy comparisons to past bubbles.
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Why Wall Street Loves the Risk
Despite the rising leverage, investors see AI debt as “smart risk.”
High-rated issuers like Microsoft, Apple, and Alphabet can easily service their loans, and yields on Big Tech bonds remain near 27-year lows. That makes debt the cheapest way to fund trillion-dollar AI bets — for now.
“The investable dollars into tech are dwarfing every other sector,” said Matt Gannon of Barclays. “It’s one of the only sectors that keeps growing.”
But others, like Bain & Co., warn that AI firms could fall $800 billion short of the revenue needed to fund these ambitions by 2030. As the cost of Nvidia chips and power infrastructure soars, even giants may be tempted to push debt further — and faster.
Investor Mood: Bullish but Cautious
The Magnificent Seven now make up nearly 30% of the S&P 500’s value, meaning their guidance directly shapes market sentiment.
Investors are divided, some see the AI buildout as the next industrial revolution; others warn of systemic risk if debt piles up faster than revenue.
As Luria put it bluntly:
“If these debt levels surge and AI demand stalls, the fallout could echo the financial crisis.”
AI’s Debt-Driven Future
In the 1990s, investors bought dreams of digital transformation. Today, they’re buying promises of artificial intelligence, and the bonds that fund it.
If AI’s productivity gains materialize, this could be the most profitable debt cycle in history. But if hype outpaces returns, the same leverage fueling today’s boom could amplify tomorrow’s bust.
Either way, AI isn’t just reshaping the tech sector, it’s reshaping the financial system itself.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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