Anne Duquerroy, Oana Furtuna, Imène Rahmouni-Rousseau and Lia Vaz Cruz
The infrastructure for artificial intelligence (AI) requires huge investments. Think of the gigantic data centres and the massive electricity consumption to power them. US tech giants, including Google, Amazon and Microsoft, operate massive cloud and AI infrastructure. That is why these companies, known as hyperscalers[1], are tapping into all corners of global financial markets to fund their expansion. And increasingly they are turning to the euro area corporate bond market for some of that funding.
The growing presence of hyperscalers in the euro area corporate bond market has several consequences. For one, it could increase concentration and raise investor exposure to the technology sector and the US economy, similar to trends already felt in equity markets, where hyperscalers have become dominant. Furthermore, the surge in big tech borrowing could make it harder for other companies and other economic sectors to access finance by reshaping investors’ asset allocations. It also raises a key market-functioning question: can euro area financial markets smoothly handle such large and concentrated debt inflows?
Πηγή: ECB