Credit Notes Expectations for Hyperscaler Debt Issuance A Top Down Approach

Credit Strategy Research 27 July 2026 | 1:21PM EDT

Credit Notes: Expectations for Hyperscaler Debt Issuance: A Top-Down Approach

The scale and scope of AI-related debt supply has been a dominant investment Amanda Lynam, CPA | theme this year. Over the past several weeks, in particular, the topic has attracted Goldman Sachs & Co. LLC interest from a wide range of market participants, across asset classes. We recently Shamshad Ali provided a granular look at the distribution of the year-to-date (YTD) AI-related | debt supply, across markets (IG, HY, loans), sub-sector, and currency. Goldman Sachs & Co. LLC

Sara Grut Given the multi-year nature of the AI buildout, however, a key question is how the | Goldman Sachs International pace and distribution of AI-related debt issuance will trend over the next few years. Spencer Rogers, CFA | In this Credit Notes, we frame our expectations for AI-related debt issuance, focusing Goldman Sachs & Co. LLC on the hyperscalers and the data center / project finance categories. With the important caveat that this analysis is subject to change as the AI investment cycle unfolds, our process follows three key steps.

1. Frame the hyperscaler CapEx trajectory. We start with our GIR equity research colleagues’ CapEx forecasts for the five hyperscalers (Amazon, Alphabet, Microsoft, Meta, and Oracle), from FY2026 to FY2030, as well as the actual CapEx spending from FY2025. We match these against actual and forecast cash flow from operations (CFO) to assess a directional trend between key sources and uses of cash. 2. Estimate a debt-financed share of hyperscaler CapEx. We then provide a top-down estimate of the share of hyperscaler CapEx in each year that we expect to be financed with debt, using FY2025 and YTD2026 figures as a starting guide. This incorporates our assessment of the significant debt capacity embedded within most hyperscalers’ balance sheets and debt ratings. It also incorporates our review of hyperscalers’ management commentary regarding capital allocation priorities and the timing between funding investment and AI monetization. Importantly, this is a top-down view and not a reflection or forecast for any individual issuer. 3. Incorporate expectations related to issuer concentration constraints and market saturation to frame the interaction of public and private markets in absorbing hyperscaler supply. While hyperscaler debt issuance has been substantial, it has represented ‘only’ 40% of YTD global AI-related debt issuance. As a result, asset allocators are managing many AI-related exposures—including issuance from the broader Technology ecosystem. As a result of this and the market saturation constraints we have previously discussed, we expect the private markets (including infrastructure) will play a larger role in absorbing AI-related debt financing, especially in FY2028 to FY2030. Away from the direct

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debt issuance from the hyperscalers, we see scope for data center financing to accelerate significantly. Such ‘project finance’ joint venture transactions have represented 22% of YTD 2026 AI-related issuance, and we see scope for this category’s share to increase further as more structures come online.

Our analysis is subject to significant uncertainty, including the pace of the AI investment and monetization cycle, as well as market receptivity—in both the debt and equity markets—to new sources of financing.

Hyperscaler commentary underscores the role of debt financing While the exact magnitude and mix of future debt issuance from the hyperscalers is uncertain, our review of management commentary leaves us expecting a growing role for debt financing in the AI buildout in the years ahead. Five key themes stand out to us, from our review of recent earnings call commentary and SEC filings.

1. Expect meaningful increase in the pace of CapEx spending. “Significant investments” are expected to meet this “consequential” and “massive opportunity.” Recent upward revisions to CapEx guidance reflect “an…