Who Will Fund AI’s $3 Trillion Ask?

Andrew Sheets, Head of Corporate Credit Research at Morgan Stanley, discusses the funding of the anticipated $3 trillion in spending on AI infrastructure by 2028. He predicts that large technology companies will fund roughly half through internal cash flow, while the remaining amount will likely come from credit markets, including corporate bonds (estimating an additional $200 billion issuance) and asset-backed finance (potentially providing $800 billion). Sheets notes that while technology companies currently borrow less than other sectors, their relatively small presence in the bond market presents both opportunities and challenges for increased borrowing. He also highlights the potential risks associated with this massive investment, including overbuilding and technological changes.