U.S. tech giants like Meta Platforms Inc. (NASDAQ:META), Amazon.com Inc. (NASDAQ:AMZN), Microsoft Corp. (NYSE:MSFT) and Alphabet Inc. (NASDAQ:GOOGL)(NASDAQ:GOOG) have plowed hundreds of billions into artificial intelligence over the past two years, initially using their hefty cash piles — but Goldman Sachs says that cushion is wearing thin, and debt is quickly becoming the next funding source.
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In a note shared Friday, Goldman analysts led by Lotfi Karoui said the liquidity positions of major tech companies are now "approaching normalcy," and that there's a "noticeable shift towards debt financing" to support surging capital expenditures in AI.
That shift is showing up across credit markets: $141 billion in corporate debt has already been issued in 2025 by companies in Goldman's AI equity basket, surpassing the $127 billion raised in all of 2024.
Of this year's total, $86 billion came from tech issuers, while utilities — key players in powering AI infrastructure — contributed another $51 billion.
What's Driving The Shift From Cash To Debt?
Two main forces are behind this move, according to Goldman:
• First, the cash buffers that once made Big Tech so financially resilient have shrunk.
Goldman highlights that current balances are now almost on par with the median investment-grade non-financial company — meaning Big Tech isn't sitting on the same mountains of liquidity it once was.
• Second, the appetite for AI infrastructure spending remains voracious. Capex growth in the AI sector is expected to rise by about 50% year over year through 2025, fueled by the need to expand data centers, invest in specialized chips and develop proprietary models.
"On the margin, the read-through is negative for aggregate credit quality," the Goldman team said, though they stopped short of sounding any major alarms.
While companies like Microsoft and Alphabet still benefit from strong cash flows and modest leverage, the changing mix in how they fund growth deserves attention.
Data Centers, Vendor Deals and Asset-Backed Securities
This shift isn't limited to just bond issuance. The data center segment of the asset-backed securities (ABS) market has seen $20 billion in deals since the start of 2024, according to Goldman.
This includes structured deals backed by future revenue from facilities designed specifically to support AI workloads.
Private and bilateral financing deals are also expanding, with vendors playing a bigger role in funding AI infrastructure through tailored credit agreements.
What Does It Mean for Investors?
So far, the pivot to debt has been absorbed relatively smoothly by credit markets, thanks to the high quality and low default risk of these issuers.
However, as AI-related investments continue to balloon, debt will likely keep piling up — possibly putting pressure on credit spreads if cash flow expectations falter.
This financial evolution matters not just for bondholders, but also for equity investors betting on AI as the next growth wave.
With capex no longer fueled purely by excess cash, returns will face new scrutiny, and the margin for error is shrinking.
Goldman's analysis underscores how AI is no longer just an innovation story — it's now deeply tied to credit dynamics that could reshape how markets assess Big Tech's balance sheets.
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