SEP · ISSUE 37 · September 10, 2026
STRUCTURE · RISKAI is now competing with the Treasury for money
The BIS puts a number on it: AI-funding debt rivals government supply.
AI BONDS 2026 (H1)
$225bn
through midyear
ANNUAL PACE
$400bn
2026 projection
YEAR-ON-YEAR JUMP
+973%
vs a year ago
THE WARNING
$400bn
→ the pace of AI debt issuance in 2026
The BIS warns that Big Tech is issuing bonds to fund its data centers at a pace that already rivals Treasury supply. With the Fed no longer a big buyer and a deficit near $2 trillion, that is direct competition for the same pool of savings.
ZOOM IN
THE NUMBER+973%
+973%
▲ AI bond issuance vs the prior year
When something multiplies tenfold in a year, the market takes time to digest how much saving it absorbs, and at what price.
That is the year-on-year jump in debt issued to fund AI. Not a trend: an avalanche.
- ISSUANCE
- — New debt a company or government sells to the market to raise funds.
- YEAR-ON-YEAR
- — A comparison with the same period a year earlier (YoY).
CONTEXT
AUTHORITYCompeting for the same savings
“The wave of debt funding artificial intelligence competes for the same savings the Treasury needs to place its own.”
The old fear was governments crowding out the private sector. Now AI is crowding out the government.
- SAVINGS
- — The money available in the system to lend or invest.
- TREASURY
- — The issuer of US government debt.
TREND
AI ISSUANCEThe curve that worries the BIS
From marginal to a Treasury rival in three years. Issuance figures are approximate.
Annual bond issuance by Big Tech to fund AI. In 2023 it was marginal; today it is systemic.
- SYSTEMIC
- — Big enough to affect the whole financial system.
- SPREAD
- — The extra premium a corporate bond pays over a government bond.
WHY IT MATTERS
THE CHAINHow AI debt ends up in your mortgage
THEY COMPETE FOR SAVINGS
There is a limited pool of money willing to lend. If AI issues $400bn, that money is not somewhere else.
THE TREASURY NEEDS BUYERS
With a deficit near $2 trillion and the Fed no longer a big buyer, the government leans on private investors to place its debt.
LONG RATES RISE
When two big issuers compete, the price of money climbs. And the long rate sets mortgages and equity valuations.
The link is not obvious, but it is direct: more demand for money, higher rates for all.
- DEFICIT
- — When a government spends more than it takes in and covers the gap with debt.
- LONG RATE
- — The yield on 10- or 30-year bonds. A benchmark for almost everything.
COMPOSITION
HOW IT IS FUNDEDWhere the AI money comes from
Debt visible on the balance sheet
More opaque structures
Reinvested profits
Approximate split. Off-balance-sheet debt is what most unsettles supervisors.
Not all of it is visible debt. A growing share is funded off-balance-sheet, harder to track.
- OFF-BALANCE-SHEET
- — Debt that does not appear directly in a company's accounts.
- OPAQUE
- — Hard to see or measure with the public information available.
WATCHLIST
5 KEY ETFsThe five gauges of this story
| LQD | 108 | ▼ -0.3% | Investment-grade corporate debt. Suffers if the AI bond wave pressures spreads. |
| TLT | 88 | ▼ -0.5% | US 20+ year Treasuries. Falls when supply pushes long rates up. |
| HYG | 79 | ▼ -0.2% | High-yield debt. First to feel any nerves in the credit market. |
| XLK | 285 | → +0.1% | US tech. Benefits from AI, but its leverage grows with the debt. |
| SGOV | 100 | → +0.0% | Short-term T-bills. A haven while the long end digests the supply. |
These five reflect the tension between AI debt, government debt, and the cost of money. Prices are approximate.
- ETF
- — A listed basket that tracks an index or an asset type.
- SPREAD
- — The extra premium a riskier bond pays over a safe one.
CLOSE
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- BIS
- — Bank for International Settlements. The 'central banks' central bank'.
- CAPEX
- — Capital spending on productive assets, here for AI.