Citadel Securities LLC is forecasting another $500 billion-plus of debt in public and private markets by 2028 to finance artificial intelligence chip manufacturing. According to reports from Bloomberg, this amount would represent more than 5% of the Bloomberg US high-grade index by 2028. Jeff Eason, head investment-grade desk analyst at the firm, expects most of this issuance will be shorter-dated, around three to five years, to match the lifespan of the chips, with a portion potentially issued as 144A private offerings. Eason noted this forecast could prove conservative, stating this has the potential to become one of the largest new sectors in investment-grade credit, with the scale being unprecedented relative to today's market.
Global markets have already absorbed roughly $570 billion of AI-related debt, primarily from hyperscalers including Amazon.com Inc., Microsoft Corp. and Alphabet Inc.'s Google. As reported by Bloomberg, since last year, the US market has digested approximately $60 billion of short-term debt with durations up to five years from hyperscalers. However, Eason estimates that chip-makers will issue $250 billion-plus by themselves in 2028 alone, representing a significant increase in financing requirements. The AI buildout is turning tech's most cash-rich companies into some of the credit market's biggest borrowers, with AI capital expenditure spending climbing to roughly $600 billion in 2026, up from approximately $400 billion in 2025 - a staggering 50% jump in a single year. Eason emphasized that investors have not yet absorbed financing of this magnitude, highlighting the unprecedented scale of the upcoming debt issuance.
Leading AI labs like Anthropic PBC and OpenAI are increasingly relying on debt structures to fund their growth. According to Bloomberg, earlier this year, Anthropic secured a roughly $35 billion financing package to purchase Google's custom TPU chips in one of the biggest private credit transactions in history. Broadcom backstopped payments on the largest senior portions of that debt, allowing Wall Street banks to trade portions of the tranche. Individual chipmakers are also joining the financing party, with MediaTek recently approving a $5 billion financing package specifically to boost production capacity for AI data center chips. These companies are burning cash to grow their businesses and are increasingly relying on all kinds of debt structures and backstops from big firms to access the investment-grade market, one of the deepest and most liquid arenas for corporate-borrowing.
Citadel launched high-grade credit in early 2024 and traded approximately $500 billion notional last year, as reported by Bloomberg. Eason noted that this forecast could prove conservative, stating this has the potential to become one of the largest new sectors in investment-grade credit. The influx of supply could reshape investment-grade credit portfolios, with investors likely needing to trim their exposure in technology, media and telecommunications sectors to create capacity for chip-financing debt. Morgan Stanley's projections paint an even wider picture, estimating the private credit market for AI data centers could reach around $800 billion by 2028, forming part of a total projected financing gap of $1.5 trillion against a $2.9 trillion global data center capex outlook.
The AI infrastructure buildout is creating significant implications for cryptocurrency markets through supply chain dynamics. Many of the same GPU chips being financed through this debt binge are architecturally similar to the hardware underpinning crypto mining operations and decentralized AI compute networks. Projects like Render, Akash, and other decentralized compute protocols are essentially competing for the same silicon. The result is a structural pivot toward debt financing, with workloads that were previously covered by surplus cash now requiring external capital. The return-on-investment question looms large over all of this, as tech companies are making a massive, leveraged bet that AI revenues will materialize fast enough to service the debt. If those returns disappoint, the resulting credit stress could trigger broader risk-off sentiment that hits crypto markets hard.
