Big Tech’s AI Funding Frenzy Drains Global Capital as Bond Sales Hit $159 Billion

Source

Korea Economic Daily

Summary

Global technology companies are raising massive sums through stock sales, corporate bonds, IPOs and private loans to compete for leadership in AI.
The five big tech companies — Alphabet, Amazon, Meta, Microsoft and Oracle — have already issued $159 billion of corporate bonds this year, surpassing last year’s full-year total.
Ray Dalio said global equity markets are overly dependent on AI-related stocks and show the features of a classic bubble.

Forecast Trend Report by Period

From jumbo IPOs and stock sales to private credit

Wall Street warns over AI concentration

US big tech bond issuance hits $159 billion this year

Already above last year’s full-year total

SpaceX, Anthropic and OpenAI listing value nears $200 billion

Ray Dalio calls it a classic bubble

Global technology companies are pulling in capital from around the world as they deploy every available financing tool to win the race for dominance in artificial intelligence. They are tapping stock sales, corporate bonds, initial public offerings and private credit markets as they amass ever-larger war chests.

Wall Street data as of June 9 show Alphabet, Amazon, Meta Platforms, Microsoft and Oracle have issued a combined $159 billion of corporate bonds this year. That has already surpassed the $108 billion they sold in all of last year in just six months. Alphabet recently also announced a massive $85 billion stock offering.

The combined listing value of SpaceX, Anthropic and OpenAI is poised to approach a record $200 billion. OpenAI and Anthropic have already raised more than $100 billion from venture capital investors. Anthropic also startled the market by signing a record $35 billion private loan deal despite tight conditions in private credit.

The fundraising push reflects the cost of building next-generation data centers and locking in access to power grids. Unlike the software development spending of the mobile and cloud era, generative AI has become a battle over physical infrastructure that requires tens of thousands of costly AI chips from companies such as Nvidia. Companies must also spend heavily on power generation facilities and cooling systems to handle enormous electricity demand. That has fueled the view that internal cash flow alone can no longer support the pace of investment.

Some on Wall Street are also worried that global equity markets have become overly dependent on AI-linked stocks. Bridgewater Associates founder Ray Dalio said in a Bloomberg TV interview on June 3 that “the market and the economy are very concentrated in one very volatile and dangerous emerging industry,” referring to AI. “This is a classic bubble,” he added.

Park Shin-young, New York correspondent, Korea Economic Daily, nyusos@hankyung.com