US Tech Giants Ramp Up Euro-Denominated Bond Financing as Massive AI Capital Expenditures May Drive Up European Corporate Borrowing Costs

on November 3, according to Wallstreetcn citing Bloomberg, that Meta is considering its first issuance of euro-denominated bonds as part of a cross-border financing plan of at least $20 billion; meanwhile, Google is advancing a €6 billion bond issuance. As the supply of corporate bonds from tech companies increases, issuers will need to offer higher yields to attract investors.

Morgan Stanley CEO Ted Pick projects that capital expenditure in the AI sector could reach $10 trillion to $15 trillion, warning that massive financing demands may crowd out borrowing needs for non-AI companies. According to Reuters, some European firms have shifted to issuing shorter-term bonds to circumvent supply pressures in the long-dated bond market.

Meanwhile, Pimco CEO Emmanuel Roman and Franklin Templeton CEO Jenny Johnson have both expressed concerns regarding the sustainability of the AI investment cycle, noting that capital-intensive expansion and uncertainty surrounding future investment returns could pose market risks.