Who Is Really Funding the AI Boom? A Quiet Shift in Global Finance
The AI boom is increasingly funded by debt and private credit, creating hidden financial risks beyond headline tech innovation.
For years, Big Tech built the future using its own cash.
Companies like Google, Amazon, and Microsoft generated so much profit that they rarely needed loans. Growth was self-funded. Balance sheets stayed clean.
AI changed that.
Training large AI models and running hyperscale data centres is not software-light. It’s capital-heavy. Entire campuses of servers, power contracts, cooling systems—each project costs hundreds of millions. Suddenly, free cash flows are not enough.
According to a new paper by the Bank for International Settlements (BIS), AI investment has quietly crossed an important line: Big Tech is now borrowing meaningfully to fund growth.
Equity is risky and dilutive. Bond markets are slow. Banks are conservative.
So capital flows elsewhere.
Private credit loans outside traditional banking—has stepped in. These funds offer speed, flexibility, and customised structures that suit data-centre risks. From almost nothing in 2010, AI-linked private credit has crossed $200 billion.
Here’s the tension.
Debt markets are pricing AI risk as “normal.”
Equity markets are pricing AI as “extraordinary.”
Both cannot be right.
If AI returns fall short, leverage becomes painful. Data centres may not hold value forever. And because private credit is opaque, stress may show up late—after risks have already compounded.
History shows this pattern. Tech booms lift GDP temporarily, then fade. Even the dot-com era didn’t permanently raise growth.
That’s the real lesson.
Reliance Industries