Magnificent 7 tech stocks on display at the Nasdaq.Adam Jeffery | CNBCWhile the prospect of a SpaceX initial public offering and the hopeful listings from OpenAI and Anthropic have juiced IPO excitement on Wall Street, the current action in tech capital markets has nothing to do with equity. Rather, it’s all about debt. Tech’s four hyperscalers — Alphabet, Amazon, Meta and Microsoft — are collectively projected to shell out close to $700 billion this year on capital expenditures and finance leases to fuel their artificial intelligence buildouts, responding to what they call historic levels of demand for computing resources. To finance those investments, industry giants may have to dip into some of the cash they’ve built up in recent years. But they’re also looking to raise mounds of debt, adding to concerns about an AI bubble and fears about a market contagion if cash-burning startups like OpenAI and Anthropic hit a growth wall and pull back on their infrastructure spending. In a report late last month, UBS estimated that after tech and AI-related debt issuance across the globe more than doubled to $710 billion last year, that number could soar to $990 billion in 2026. Morgan Stanley foresees a $1.5 trillion financing gap for the AI buildout that will likely be filled in large part by credit as companies can no longer self-fund their capex. Chris White, CEO of data and research firm BondCliQ, says the corporate debt market has experienced a “monumental” increase in size, amounting to “massive supply now in the debt markets.”The biggest corporate debt sales this year have come from Oracle and Alphabet.Oracle said in early February that it planned to raise $45 billion to $50 billion this year to build additional AI capacity. It quickly sold $25 billion of dollars worth of debt in the high-grade market. Alphabet followed this week, upping the size of a bond offering to over $30 billion, after holding a prior $25 billion debt sale in November. Other companies are letting investors know that they could come knocking. Amazon filed a mixed shelf registration last week, disclosing that it may seek to raise a combination of debt and equity. On Meta’s earnings call, CFO Susan Li said the company will look for opportunities to supplement its cash flow “with prudent amounts of cost-efficient external financing, which may lead us to eventually maintain a positive net debt balance.” And as Tesla bolsters its infrastructure, the electric vehicle maker may look to outside funding, “whether it’s through more debt or other means,” CFO Vaibhav Taneja said following fourth-quarter earnings. With some of the world’s most valuable companies adding to their debt loads by the tens of billions, Wall Street firms are plenty busy as they await movement on the IPO front. There haven’t been any IPO filings from notable U.S. tech companies this year, and the attention is focused on what Elon Musk will do with SpaceX after he merged the rocket maker with AI startup xAI last week, forming a company that he says is worth $1.25 trillion. Reports have suggested SpaceX will aim to go public in mid-2026, while investor Ross Gerber, CEO of Gerber Kawasaki, told CNBC he doesn’t think Musk will take SpaceX public as a standalone entity, and will instead merge it with Tesla. As for OpenAI and Anthropic — competing AI labs that are both valued in the hundreds of billions of dollars — reports have surfaced about eventual plans for public debuts, but no timelines have been set. Goldman Sachs analysts said in a recent note that they expect 120 IPOs this year, raising $160 billion, up from 61 deals last year. ‘Not that appetizing’Class V Group’s Lise Buyer, who advises pre-IPO companies, isn’t seeing bustling activity within tech. The volatility in the public markets, particularly around software and its AI-related vulnerabilities, along with geopolitical concerns and soft employment numbers are some of the factors keeping venture-backed startups on the sidelines, she said.”It’s not that appetizing out there right now,” Buyer said in an interview. ” …
