Summary of Key Points
Recently, global tech and AI giants have been aggressively raising funds through various means such as equity financing, bond issuance, and IPOs, all of which are being directed towards the construction of AI data centers and infrastructure. Despite concerns about the potential expansion of an AI bubble and excess investment, the demand for AI investments remains strong. Tech stocks have performed exceptionally well, corporate bonds have seen a surge in subscriptions, and interest rates remain low. In fact, AI investments have even helped mitigate the impact of the oil crisis on the global economy. However, risks such as over-investment, liquidity siphoning, and the sustainability of profits are gradually accumulating.
1. AI Giants Go All Out with Financing: Record-Scale Debt and Equity Issuances
To accelerate the construction of their infrastructure, AI giants have resorted to various financing methods:
- Equity Financing: Google's parent company, Alphabet, conducted the largest equity financing in history, raising $85 billion (Warren Buffett directly purchased $10 billion, and the public offering amount increased from $30 billion to $45 billion due to overwhelming demand). OpenAI, Anthropic, and SpaceX are all preparing for IPOs, which could set a new record for IPO fundraising in the U.S. stock market this year.
- Bond Financing: AI giants like Alphabet and Amazon have issued $159 billion in bonds this year (an increase of $50 billion from last year and nine times the amount for 2024 as a whole). They have also issued bonds in multiple currencies globally, including Canadian dollars, Japanese yen, euros, and even a rare 100-year British pound bond (the first time a tech company has done so since the internet bubble). Amazon has also issued Canadian dollar bonds, while Oracle issued $43 billion in bonds in half a year.
All of this money is being used for one purpose: building AI data centers, purchasing chips, and expanding infrastructure.
2. The Scale of AI Investments Comparable to the "19th Century Railroad Revolution"
The level of investment in AI is unprecedented:
- Just four tech companies have spent over $670 billion on AI infrastructure this year, a proportion higher than during the railway expansion period in the 1850s (when railways were considered major global transformative projects).
- Alphabet's capital expenditures for the year amounted to $185 billion (twice that of last year). Oracle is spending billions to transform from a software company into a cloud computing powerhouse by renting out its chips to companies like OpenAI.
This suggests that global tech companies are collectively betting on AI having a similar transformative impact on the future economy as railways did.
3. Why Is the Market Buying Into AI Investments?
There are two main reasons why investors are willing to invest:
- Low Risk: The bonds of AI giants are considered very safe. For example, the 10-year bonds of Alphabet and Microsoft offer higher returns than U.S. government bonds, indicating that investors believe these companies are unlikely to default.
- Strong Confidence: Tech stocks have performed well (the S&P Tech Index rose 31% quarter-on-quarter), and Anthropic's revenue is expected to double to $10.9 billion in the second quarter, which should cover the costs of model training. Alphabet's 100-year bond even saw tenfold oversubscription, indicating a strong market demand.
In short, investors believe that AI will be profitable, and the giants have sufficient financial resources to withstand potential losses.
4. Bubble Concerns Remain Unresolved, but Risks Are Accumulating
Despite the current enthusiasm, there are several concerns:
- Over-Investment: Some worry that the giants may build too many data centers, leading to unused capacity and potential losses.
- Liquidity Siphoning: If companies like OpenAI go public simultaneously, it could draw money out of the market, potentially causing a stock market downturn (as seen last week with the sharp decline in tech stocks).
- Profitability Issues: It is uncertain whether products like ChatGPT and Gemini will be able to generate sustained profits. While Anthropic has managed to cover its costs for now, the long-term outlook remains unclear.
However, market participants generally believe that the bubble has not yet burst, and the giants still have time to continue investing, given the massive scale of AI infrastructure development.
5. AI Investments Unexpectedly Help Mitigate the Economic Impact of the Oil Crisis
The conflict in the Middle East has led to rising oil prices, dampening global economic growth (Fitch has lowered its global growth forecast for 2026 by 0.2 percentage points to 2.4%). However, AI investments have served as a buffer:
- U.S. investment in AI-related IT increased by 18% year-on-year in the first quarter of 2026, and other countries are also making significant investments.
- Global semiconductor sales surged by 80% in March (AI requires a large number of chips), boosting global trade.
In essence, the enthusiasm for AI investments has partially offset the negative effects of rising oil prices on the economy.
Conclusion
AI investments are currently in a "crazy but controllable" phase. Giants are investing heavily to secure their positions, and the market is willing to support them, helping the economy withstand the impact of the oil crisis. However, the risks associated with an AI bubble are also accumulating. Ordinary people don't need to worry too much about a immediate burst of the bubble—for now, AI remains the most dynamic growth driver in the global economy.