AI in Focus: Corporate Debt Creating Opportunities for Credit Investors
Author: Ben Baldasaro
September 11, 2026
Artificial intelligence (AI) has been the dominant theme in equity markets throughout 2026. Investors have largely focused on the hyper-scalers and their enormous investments in AI infrastructure. Yet large-cap technology is only part of the story as AI is reshaping industries across sectors.
This edition of AI in Focus puts credit in the spotlight.
Two years ago, the clearest way to play the budding AI trade was through the equity markets. Stocks remain a viable way to invest in this technological revolution, but fixed income—specifically credit—has emerged as another avenue.
It’s not all that surprising that the hyperscalers have needed to tap into their massive cash balances and the credit market to finance their AI capital expenditure. It’s the extent to which they are issuing investment-grade corporate debt that has been unexpected when compared to their historical balance sheet management.
The creation of special purpose vehicles (SPVs)—separate legal entities that hold assets against which more debt can be issued—is also becoming increasingly common, often into the high-yield market to target a different demographic of investors. This separation allows for the isolation of some financial risk from the parent company while securing more funding for the construction of data centres and other AI-related projects. In some cases, most commonly amongst the hyperscalers, this SPV financing is being raised outside the parent company’s core balance sheet, which can in turn reduce the amount of leverage reflected in its traditional corporate debt metrics.
Beyond the hyperscalers’ offerings, there are also SPV, high-yield, and convertible bond issuances coming from smaller players like the neo-cloud companies to consider. This all amounts to a more diverse landscape of options across the AI stack for credit investors who seemingly had no entry point less than 24 months ago.
The sheer volume of AI-related debt entering the market has not come without its challenges for issuers, though. An abundance of supply has made investors increasingly selective, leading them to demand higher yields to participate in new offerings and forcing greater concessions. The hyperscalers tapping the equity market to raise financing reflects the growing challenge in this regard. As such, the ability for companies to monetize AI may determine how attractive these opportunities become. Calling AI a tailwind is one thing, using it to boost margins and cash flows is another.
While skepticism surrounding AI monetization may therefore be warranted, concerns regarding circular financing may be overblown. This is the process through which hyperscalers invest in companies that will eventually buy from them. These agreements are unideal from a concentration perspective, but don’t change the underlying demand for computing power, chips, and data centre capacity.
Ultimately, a lot has changed over the last two years. Credit investors have gone from having no way to invest in AI to having more issuances than they can handle at their disposal. While it will undoubtedly take some work to parse through all the options, interesting opportunities are out there for those willing to do so.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds, or investment strategies.
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