AI companies have raised $236 billion from bond markets as of May 31, 2026 — four times the pace from the previous year — and Morgan Stanley is cashing in. The bank earned $2.3 billion in fees from AI bond deals in the first six months of 2026, up from $1.4 billion a year earlier, and now ranks second only to JPMorgan Chase in the space. But the easy money isn't lasting: investor demand for new AI debt has cooled sharply since February.
Inside the numbers
Morgan Stanley expects AI companies to raise a total of $570 billion from bonds this year. The bank itself led $65 billion in AI bond deals in late 2025 alone, helping it overtake Goldman Sachs in league tables. The surge is driven by Big Tech's insatiable appetite for data-center capacity — Google, Meta, and Oracle are among the biggest borrowers. Data centers need $2.9 trillion through 2028, and the tech giants' cash piles cover only half of that.
Demand hits a wall
In February, bond buyers snapped up nearly five times the amount of AI bonds offered. By July, that multiple had fallen to under two times. The chill comes after a record run: TeraWulf's $3.2 billion bond sale in late 2025 drew $10 billion in orders at a 7.75% yield, a sign of just how hot the market was. But the cost of borrowing is also rising. In late 2025, insuring Oracle's debt cost more than at any time since 2009.
Google and Meta take different paths
Google is backing $3.2 billion in leases at TeraWulf's New York campus. If the tenant stops paying, Google picks up the tab. The deal also gives Google the right to buy roughly 14% of TeraWulf. TeraWulf, once a Bitcoin miner, has pivoted to building AI data centers. The transition helped fuel a rally in miner stocks — Cipher Mining secured a similar deal shortly after.
Meta went a different route. It arranged a $27 billion private credit deal for its Hyperion campus in Louisiana — the largest private credit deal ever. Partner Blue Owl owns 80% of the campus, keeping the debt off Meta's balance sheet. That structure lets Meta avoid the bond market entirely, at least for now.
The bond market is still open, but the window is narrowing. Morgan Stanley and JPMorgan will keep competing for mandates, but the days of guaranteed oversubscription are over. The next big test: whether TeraWulf's follow-up deals can repeat the 3x oversubscription its first bond saw. If they can't, the price of AI debt — and the pace of data-center construction — could get a lot more expensive.
