The $5 Trillion Infrastructure Bill: AI Debt Markets Hit a Reality Check
The artificial intelligence narrative is shifting from software valuations to hardware realities. As the initial euphoria of Generative AI settles, the market is waking up to the staggering cost of the physical infrastructure required to power it. New data suggests the global build-out of data centers and energy grids faces a capital requirement ranging from $5 trillion to $7 trillion through 2030. While equity markets have captured the upside, debt markets are now being asked to finance the steel, concrete, and cooling systems found in the trenches.
According to recent reports, AI-tied project financing has surged nearly 730% year-over-year, jumping from $15 billion in 2024 to $125 billion in 2025. This explosion in capital demand has pushed borrowing beyond traditional bank capacities, creating a massive funding gap that private credit monitors closely. However, as demand heats up, cracks are appearing in the discipline of lenders chasing the “AI halo,” with reports of some borrowers seeking loans at 150% of construction costs based on speculative future valuations.
The Great Risk Transfer
A critical trend emerging in late 2025 is the “off-balance sheet” maneuver. Major technology firms—including Microsoft, Meta, and Google—are increasingly utilizing complex leasing structures and intermediaries to secure computing power without formally adding debt to their own ledgers. This effectively pushes the financial risk downstream to smaller developers and their lenders.
Credit default swaps (CDS) for major players like Oracle have spiked to multi-year highs, signaling that sophisticated investors are beginning to price in the risks of over-leverage. The market is witnessing a bifurcation: “Investment Grade” issuers are protecting their balance sheets, while the actual asset risk is being concentrated in the private markets. Fears of a supply glut are rising, drawing comparisons to the fiber-optic bubble of the late 1990s.
The Bond Capital Perspective: Financing Assets, Not Hype
The current volatility in AI debt markets highlights the danger of undisciplined capital. When lenders accept “synthetic leases” or lend against aggressive future enterprise values rather than tangible assets, they introduce systemic fragility. At Bond Capital, we distinguish between the speculative and the structural.
We recognize that the AI infrastructure build-out is a legitimate industrial cycle requiring flexible, patient capital. However, accurate credit adjudication requires looking past the “AI” label to the underlying collateral. We finance complex capital expenditures—heavy equipment, real estate, and construction—based on liquidation value and cash flow visibility, not theoretical adoption curves. As public markets and banks retreat or lend recklessly, Bond Capital remains a stable partner for borrowers who own real assets and require certainty of execution.
