Via axios.com
Citadel forecasts $500B in debt for AI chip funding by 2028
Citadel Securities expects chipmakers and AI companies to raise more than $500 billion across public and private credit markets by 2028.
Technology companies could issue more than $500 billion of debt through public and private markets by 2028 to finance the chips powering artificial intelligence data centers, according to a Bloomberg report citing Citadel Securities.
The projected borrowing would equal more than 5% of the Bloomberg US high grade bond index by 2028, according to Jeff Eason, Citadel Securities’ head investment grade desk analyst.
Most of the debt is expected to mature within three to five years, matching the relatively short useful life of advanced AI chips. Some of the financing could also be issued through private 144A offerings available to institutional investors.
Eason said the forecast may ultimately prove conservative as spending on AI infrastructure continues to accelerate.
The borrowing could develop into one of the largest new sectors in investment grade credit and significantly alter the composition of corporate bond portfolios.
Global markets have already absorbed about $570 billion of AI related debt, much of it issued by hyperscalers including Amazon, Microsoft and Google as they expand their data center networks.
Since 2025, those companies have issued roughly $60 billion of shorter term US debt with maturities of up to five years.
That total remains well below the more than $250 billion in debt Citadel estimates chipmakers alone could issue during 2028.
Demand for external financing is also rising among AI developers such as OpenAI and Anthropic as they spend heavily on computing capacity while continuing to generate negative cash flow.
Anthropic secured a financing package of about $35 billion earlier this year to purchase Google custom processors. Broadcom supported payments on the senior portions of the transaction, allowing banks to distribute parts of the debt to investors.
The expansion of chip financing could force bond investors to reduce existing exposure to technology, media and telecommunications companies to make room for the new supply.
Citadel Securities expects the borrowing wave to influence credit spreads, portfolio construction and capital allocation across the broader AI industry.