Moody's and S&P Downgrade Akamai Over AI Debt

Akamai Technologies Inc faced credit rating downgrades from both Moody's Ratings and S&P Global Ratings on Monday. The agencies responded to the company's decision to raise more than $2 billion in convertible debt to finance the expansion of its AI edge infrastructure.

S&P Global Ratings lowered the company's rating to BB+, shifting it into speculative-grade territory, while Moody's Ratings reduced the rating to Baa3. The downgrades follow Akamai's all-debt financing strategy for capital expenditures, which includes more than $14 billion in cloud infrastructure contracts this year.

A primary driver of this spending is a seven-year agreement with AI developer Anthropic valued at up to $11.6 billion. Rating agencies warned that this partnership creates significant concentration risk, as Anthropic is projected to account for roughly 25% of Akamai's consolidated revenue by 2028.

Although Akamai maintains over $4 billion in liquidity, the agencies cautioned that pursuing further mega-contracts or expansion without equity funding could continue to pressure the company's credit metrics.