How Credit Markets Could Finance AI’s Trillion Dollar Gap

Vishy Tirupattur, Morgan Stanley's Chief Fixed Income Strategist, interviews Vishwas Patkar, Head of U.S. Credit Strategy at Morgan Stanley, about the financing challenges and opportunities within the AI and data center markets. They discuss a projected $1.5 trillion financing gap over the next four years, outlining how this gap will likely be filled through various credit channels, including private credit (primarily asset-based finance), investment-grade bonds, securitized credit, and other sources. The conversation details the roles of different financing methods, explores the reasons behind the limited use of corporate bonds by tech companies, and analyzes potential risks to their financing projections, focusing on macroeconomic factors and the rate of AI monetization.