AI investment is reshaping the bond market! Sunak: By 2027, net long-term debt issuance by tech companies may exceed that of the U.S. government.

Former UK Prime Minister Rishi Sunak said that tech companies are poised to become a larger net issuer of long-term debt than the U.S. government by 2027, driven by artificial intelligence (AI) investment. This judgment highlights that AI capital expenditure is profoundly changing the supply-demand structure of the global long-term financing market. A major shift is taking place in capital markets: private-sector tech investment is absorbing a portion of long-term financing that has historically been dominated by sovereign borrowers; this is putting upward pressure on yields at a time when European governments' finances are already stretched. Speaking at an economic forum in New Delhi, Sunak said: "The demand for capital from tech companies is so enormous that, remarkably, if you look at long-term debt, say debt with a maturity of more than 10 years next year, I think tech companies will become a larger net issuer of debt than the U.S. government." Sunak believes that AI-driven capital expansion is intertwining with another structural pressure: governments in Europe and elsewhere are struggling to maintain fiscal discipline, a trend he attributes to the rise of populist politics. He said these factors together are exacerbating the fiscal challenges facing European governments.