Could the AI boom make borrowing more expensive in Europe?

US tech giants Amazon, Alphabet, Meta and Oracle have issued about $250 billion in dollar bonds since the start of 2025, according to a tally of US regulatory filings by AI Industry Reviews, an independent platform that evaluates AI tools. They have also sold €37 billion ($41 billion) of bonds in euros. Microsoft recently joined with a $25 billion dollar bond sale.

Goldman Sachs projects that total new AI hyperscaler bond sales will reach $420 billion next year. ING, a Dutch bank, expects about €60 billion of that to be issued in euros.

DW reports that these sales compete with European governments and companies for investment capital. France's public debt is 119% of gross domestic product, and its deficit is above 5%. Yields on French 10-year bonds rose from roughly 3.7% to nearly 5% over the past six months. DW reports that France's interest bill is set to rise from €79 billion to €91 billion next year, and to more than €100 billion by 2028.

In August, economists at the European Central Bank said the euro bond market was adapting well to the AI giants. They warned, however, that these issuers "could make it harder for other companies and other economic sectors to access finance." They also questioned whether the bloc's markets can handle such large, concentrated debt inflows, and flagged a "potential spillover to the sovereign and supranational segment."

Viktor Hjort, global head of credit strategy at BNP Paribas, told DW that the hyperscalers' presence in the euro bond market is "already high enough to create competition" between corporate and government borrowers for fixed-income funds.

Goldman Sachs warned that rising interest costs are hurting European companies. Among firms in the Stoxx 600 index, interest costs as a share of sales have risen by nearly half since 2022, and Goldman estimates this has cut earnings by more than 5% over the same period.

An OECD study published in January compared local bond markets in Belgium, Germany, Spain, Sweden and Canada. Christos Makridis of Arizona State University told DW that in the US, AI investment is linked to lower municipal borrowing costs, but "the opposite appears to hold in several European countries."