The ECB sounded the alarm: US tech giants' “AI debt flood” may overwhelm the Eurozone, and financing costs are facing upward pressure

The Zhitong Finance App learned that as the AI computing power competition extends from chips to every corner of the global capital market, a wave of bond issuance led by US tech giants is triggering high vigilance at the highest level of the European Central Bank. On September 1, the ECB published a special blog post, issuing a rare severe warning about the “massive invasion” of US hyperscale technology companies in the Eurozone bond market: if this trend continues, it will not only drive up financing costs for all industries, but may also have a spillover effect on the Eurozone sovereign bond market.

AI “burns money” at an accelerated pace: hyperscale enterprises may need to borrow more than trillion US dollars by 2028

The ECB pointed out in its blog that AI infrastructure requires huge investment — huge data centers and the electricity consumption that supports its operation, causing the five largest US tech companies, Alphabet, Amazon, Meta, Microsoft, and Oracle, to switch from “internal self-financing” to “external financing.”

Credit analysts estimate that by 2028, the five companies' total demand for AI-related capital expenditure will exceed $1 trillion — equivalent to 3% of the current annual US GDP. This scale far exceeds what can be covered by companies' internal cash flows, forcing them to move into the global bond market.

The “crowding out effect” of the Eurobond market is showing: the 40 billion stock already accounts for nearly 10% of the new stock

According to ECB data, the presence of US hyperscale companies in the Eurozone bond market is rising sharply:

In the first half of 2026, Alphabet and Amazon alone issued 25 batches of bonds in the Eurozone and Swiss franc markets, with a total outstanding amount of approximately 17.5 billion euros and 6.26 billion Swiss francs. Amazon also issued bonds worth up to 10 billion euros in the European market in March of this year, which were split into eight batches with different terms, extending from 2 years to 38 years.

Although the 40 billion euro stock is still a “relatively small share” of the overall market, the share of new releases of nearly 10% means that the marginal impact is rapidly expanding. The ECB specifically stated that Amazon and Alphabet have become the largest issuers in the Eurozone non-financial corporate bond market this year. Between 2025 and 2026, these companies almost doubled their share of “Reverse Yankee Bonds” (Reverse Yankee Bonds) issuance in the Eurozone.

Investors such as European pension and insurance companies are buying large amounts of large-scale corporate bonds — as of March 2026, such bonds accounted for 15% of the increase in euro corporate bond holdings. The automatic position adjustment behavior of passive investors when tracking bond benchmarks may further amplify the crowding out effect.

Macro resonance: soaring US bond yields and pressure on global bond markets

The ECB's warning comes at a time when the global bond market is facing a new wave of sell-offs. On September 2, the US 10-year Treasury yield climbed to 4.816%, the highest level since the end of 2023; Japan's 10-year Treasury yield broke 3% for the first time since 1996; and the German 10-year Treasury yield rose to 3.377%, a record high since 2011.

In this macro context, large-scale bond issuance by US tech giants may further increase market pressure. The ECB blog points out that the issuance of new bonds may test investors' ability to withstand it, and expectations that the supply of bonds will expand further may amplify this impact. ECB economists warn that tech giant debt may actually “saturate” the Eurozone bond market, forcing issuers to provide higher yields to attract investors.

Triple risk: from “crowding out” to “overly optimistic” credit ratings

First, the overall increase in financing costs. The blogger clearly stated: “As large US technology companies accumulate debt and increase their share in the bond market, they may drive up borrowing costs in all industries and may spill over into sovereign and supranational bond markets.” ECB economists specifically warn that this trend could crowd out demand for European government bonds — and Eurozone sovereign bond yields have been high for 15 years.

As passive investors track bond benchmarks, they will automatically increase their holdings in the technology sector, putting additional pressure on competitive bonds. Eurozone sovereign bond yields hit a decades-high on Monday. German 10-year treasury yields rose to 3.32%, the highest level since 2011.

Second, investors' “digestibility” is being tested. The number of new bonds issued may “test investors' appetite,” and market expectations for larger bond supply may amplify this effect, further driving up borrowing costs for the entire market.

Third, credit ratings may be “too optimistic.” The blogger raised an even sharper question: the way ratings agencies evaluate the industry “may be based on assumptions about future revenue growth and leverage ratios, and these assumptions may not stand the test of time, thereby increasing the risk of mispricing credit risk.”

The “sword of Damocles” in the sovereign bond market

Although the ECB admits that due to the relatively small issuance of technology bonds so far and the “resilience” of the European sovereign bond market, “there are currently no obvious spillover effects in the Eurozone.” However, the blog also warned that the AI hegemony dispute means that the impact of such debt issuance “is likely to intensify in the next few years.”

The Euractiv report further indicates that huge financing needs for AI data centers are increasingly driving major US tech companies to issue Euro-denominated debt — a practice that may crowd out investors' willingness to buy European government bonds. As the weight of hyperscale enterprises in the bond index continues to increase, investors' asset allocations may be “mechanically rebalanced” to shift from sovereign bonds to technology bonds.

The ECB warns that this “may only be the beginning of an unprecedented wave of financing, which will significantly reshape the bond market, including the Eurozone, and push issuers, intermediaries, and investors to adapt.”

Although the blog emphasizes that the Eurozone “has not seen significant spillover effects” so far, intense competition for AI dominance means this impact is likely to increase in the next few years. The ECB raised a key market operation question: Can the Eurozone financial market smoothly absorb such a large and concentrated inflow of debt?

US tech giants have issued about $200 billion in bonds since 2026. The amount of bonds issued by hyperscale enterprises this year reached 220 billion US dollars, more than double the total amount for the full year of 2025. Morgan Stanley expects global AI-related bond issuance to be close to US$570 billion in 2026.

At the end of the article, the blogger made a profound judgment: “This may only be the beginning of an unprecedented wave of financing, which will significantly reshape the bond market, including the Eurozone, and prompt issuers, intermediaries, and investors to make adjustments.”