European Central Bank Warns Big Tech Debt Wave Could Raise Borrowing Costs
The European Central Bank (ECB) has issued a stark warning regarding the financial spillover effects of US technology giants borrowing heavily in European capital markets. In an analytical blog post published by ECB economists, the central bank highlighted that hyperscalers—including Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle—are rapidly increasing their euro-denominated corporate bond sales to fund sprawling artificial intelligence infrastructure and data center developments.
These US tech giants are leveraging lower interest rates in the euro area compared to the United States, utilizing currency swaps to convert euro borrowings into dollars at cheaper rates. Consequently, euro-denominated bond issuance by US tech firms has nearly doubled between 2025 and 2026, with major firms like Amazon selling billions of euros in corporate debt. Big tech companies now account for roughly 10 percent of all new euro corporate bond issuances.
While the current debt volume of around €40 billion has not yet disrupted sovereign debt markets, ECB analysts caution that tech capital expenditure is projected to exceed $1 trillion globally by 2028. This unprecedented borrowing surge risks crowding out European corporate and sovereign debt issuers by soaking up available investor capital. As institutional portfolios automatically increase their exposure to tech debt, European businesses seeking capital could face higher borrowing costs and tightened credit conditions in the coming years.
