Robin Wigglesworth, an editor at the Financial Times, discusses the economic impacts of artificial intelligence (A.I.) in relation to debt. Despite the focus on companies like Nvidia, valued over $5 trillion, or Elon Musk’s SpaceX, the real story behind A.I. is its connection to debt.

The Link Between A.I. and Debt

A.I. is not just about advances in technology but also about the financial obligations it creates. Historical instances of debt-financed investments, such as 19th-century railways or the 21st-century housing market, often ended badly despite technological advancements.

The immense computing power needed for A.I. models has shifted funding sources. Traditionally, data centers were funded by cash flows from tech giants like Facebook or Google. Now, companies referred to as ‘hyperscalers’ increasingly rely on loans, bonds, and other financial commitments.

Staggering Levels of Debt

The scale of debt related to A.I. developments is remarkable. Barclays analysts have described current market conditions as unprecedented. Morgan Stanley reports that in 2025, American A.I. companies raised $217 billion from debt markets. By mid-2026, this figure jumped to $445 billion, with projections reaching $600 billion by year-end. This total exceeds the combined 2026 budgets for significant U.S. government departments.

This trend highlights the financial risks associated with A.I. investments. Despite optimism about technological progress, the reliance on debt suggests caution is necessary.