JPMorgan: AI-Related Bond Issuance Expected to Remain Strong in Coming Years

On June 16, JPMorgan analysts stated that bond issuance for financing AI and data centers is likely to remain robust. JPMorgan noted that loans typically cover 85% of total project costs, a high ratio that is expected to drive total spending on artificial intelligence to $5.5 trillion by 2030, with approximately $4.1 trillion financed through debt. Debt issuers are expected to tap into 'every capital market in every country' to meet their growing financing needs. JPMorgan believes that large technology companies, referred to as 'super-scale cloud service providers,' have strong enough profitability that investors will maintain confidence even as the scale of debt issuance continues to expand. The bank also speculated that these companies are currently borrowing heavily, partly to retain their substantial cash reserves in case of future economic downturns and significant increases in financing costs.