Morgan Stanley Reports Lull in Global AI Debt Issuance

Morgan Stanley credit strategists reported a significant lull in global AI-related debt issuance during September, with total supply falling to approximately $23 billion. The decline was most pronounced in the United States investment grade market, which recorded zero issuance for the month.

Analysts characterized the trend as "a pause, not a pullback," stating that the slowdown does not signal weakening fundamentals or a lack of available capital. The bank attributed the drop to three primary factors: heavy front-loading of issuance during the summer, emerging political and regulatory challenges surrounding the construction of new data centers, and a rates selloff that may require project-level renegotiations for data center deals.