The massive expansion of artificial intelligence infrastructure is transitioning from a tech innovation story to a corporate financing challenge. Capital expenditures in the sector are projected to surpass US$1.1 trillion by 2027.
Major hyperscalers and cloud providers are increasingly relying on debt issuance rather than internal cash flows to fund this buildout and protect credit ratings.
AI Capex
Consequently, AI concentration is rising across investment-grade credit indices, diminishing traditional equity-and-bond diversification benefits.
Analysts suggest investors seek alternative asset classes—such as convertibles, securitised credit, and non-tech equity sectors—to manage balance sheet risks and navigate rising corporate financing demands.
Source: Schroders
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