AI Debt Financing Slumps as Investors Scrutinize Massive Borrowing
Borrowing by artificial intelligence firms dropped from $113 billion in June to $23 billion in September, according to Morgan Stanley data cited by the Financial Times. The decline comes amid a $466 billion debt boom tied to AI investment, with investors increasingly questioning whether the spending will yield adequate returns. The figures do not by themselves show whether AI demand is weakening or companies are scaling back plans.
AI-related debt issuance fell from $113 billion in June to $23 billion in September, a $90 billion drop over three months, according to Morgan Stanley figures cited by the Financial Times. The September total followed unusually heavy borrowing earlier in the year, so the comparison is against a record period.
The decline occurred alongside a $466 billion AI-linked debt boom. Sona Asset Management’s John Aylward told the FT that financing conditions had become tighter and more restrictive. The data alone cannot show whether AI demand is softening or firms are merely adjusting funding plans.
A slower pace of AI-related borrowing could affect technology firms, their suppliers, employees, and investors. If financing becomes harder or costlier, some companies may delay expansion, research, or hiring, while others could seek equity or internal funds. Investors may reassess risk across AI-linked debt. Consumers might eventually see changes in the pace or pricing of AI services, though the data alone cannot confirm such outcomes.