Citadel Securities is calling for more than $500 billion in fresh debt issuance by 2028, nearly all of it flowing into one channel: chips for AI data centers. The projection lands as credit markets already strain under record borrowing from tech firms, with no slowdown in sight.
The scale is brutal. AI capex will hit roughly $600 billion this year, up 50% from $400 billion in 2025. That's not gradual acceleration. Morgan Stanley's own math widens the picture further, estimating the private credit market for AI infrastructure alone could balloon to $800 billion by 2028, part of a projected $1.5 trillion financing gap against $2.9 trillion in total global data center spending.
The bond and loan velocity tells you everything. Hyperscalers dumped about $75 billion in debt during September and October 2025 alone, all tagged for AI data center builds. Secured data center debt in the US hit $25.4 billion last year, a 112% jump year-over-year. MediaTek just locked in a $5 billion financing package explicitly for AI chip production capacity. Individual chipmakers aren't waiting for the market to cool.
Why even cash-rich giants are turning to debt
The infrastructure race is so capital-intensive that companies pulling in tens of billions annually in free cash flow can't self-fund anymore. Workloads that used to get covered by surplus cash now require external capital. Tech firms are increasingly using off-balance-sheet financing structures to absorb the pressure without trashing their financial metrics.
The same GPU architectures being financed through this debt binge power both AI data centers and crypto networks. The capital flows reshape credit markets far beyond Silicon Valley, pulling in traditional finance players who've never touched semiconductor lending before.
Debt markets absorbed the shock. Credit spreads tightened slightly on the news.
This article is informational only and not financial advice. Debt projections and market forecasts involve uncertainty and actual outcomes may differ significantly.
