AI Chip Financing to Trigger Largest Debt Surge in History? Citadel: Tech Giants May Issue Over $500 Billion by 2028

Just as global credit markets digest the massive debt wave from data center construction, an even larger financing surge may be on the horizon—one that could fundamentally reshape the investment-grade credit landscape.

According to a new analysis by market maker Citadel Securities, U.S. tech giants are expected to issue over $500 billion in debt through public and private markets by 2028 to continue purchasing AI chips.

Jeff Eason, Head of Investment-Grade Credit Research at Citadel, stated that this upcoming financing wave is "unprecedented relative to current market size," and emphasized that this estimate may still be conservative.

Eason noted that if the $500 billion forecast proves accurate, the volume would account for over 5% of the Bloomberg U.S. Investment-Grade Index.

In other words, investors may be forced to rebalance their portfolios, reducing exposure to technology, media, and telecom (TMT) holdings to make room for the incoming supply of chip-related bonds.

In fact, global credit markets have already absorbed around $570 billion in AI-related debt, primarily issued by "hyperscale cloud providers" such as Amazon (AMZN-US), Microsoft (MSFT-US), and Google under Alphabet (GOOGL-US), to fund data center expansions.

The U.S. market alone has taken in approximately $60 billion in short-term debt with maturities of up to five years since last year.

But Eason warns that these figures will pale in comparison to the demand from chip financing. He estimates that chip manufacturers alone could issue over $250 billion in debt in 2028 alone.

"Investors have never experienced a financing shock of this magnitude," he said.

Structurally, Eason expects most chip-related debt to fall in the three- to five-year range, aligning with the typical lifecycle of AI chips. Some issuance may also occur under Rule 144A for private placements.

This implies that markets will need to absorb large volumes of supply in relatively concentrated timeframes.

Recently, AI firms like Anthropic have demonstrated heavy reliance on diversified debt instruments. Earlier this year, Anthropic secured a financing package worth approximately $35 billion to purchase Google’s custom TPU chips—an arrangement considered one of the largest in private credit history.

Notably, Broadcom provided credit backing for the senior tranche of this debt, enabling major Wall Street banks to distribute and trade these debt instruments in the market.

Another AI leader, OpenAI, is also burning through cash at an alarming rate and increasingly relies on debt support and guarantee mechanisms from large institutions to maintain its expansion and access capital markets.

Citadel entered the investment-grade credit market in early 2024. According to Sam Berberian, the firm’s Global Head of Credit Trading, its notional trading volume in this segment reached approximately $500 billion last year.

Eason and his team, including investment-grade credit analyst Tucker Roberts, believe that a flood of chip-related bonds could create a new benchmark segment in the investment-grade market—reshaping credit spread dynamics, portfolio allocation logic, and capital deployment across the AI supply chain.

"This isn’t just about the scale of financing," Eason concluded. "It could fundamentally alter the composition of the investment-grade market."