Money For the Rest of Us · Wednesday, July 29, 2026
The AI infrastructure buildout is being financed through various channels including investment-grade bonds (making up about 14% of that market), direct bank lending, and private credit. Special purpose vehicles are also used for off-balance sheet lending, which introduces a lack of transparency.
“The largest by far is investment grade bonds. They are found in ETFs. And this is kind of what this member was getting at. How much exposure do I have?”
“Now, these are public bonds issued by hyperscalers and Nvidia and Amazon, Meta and others, Alphabet. And they're investment grade. And their borrowing. So, it's about 14% of the investment grade bond market right now.”
“But another is just bank, bank lending. Banks are lending to the AI infrastructure. That's what banks do. They lend.”
“Now, there's also off-balance sheet lending, with special purpose vehicles. So you have institutional investors partnering with these data center builders. And sometimes there's a hyperscaler in the background. But it's it's off-balance sheet debt. And this is something that lacks transparency.”