Wall Street Struggles to Absorb $220 Billion AI Debt Surge

Wall Street is experiencing difficulty absorbing a surge in debt issued to fund artificial intelligence infrastructure. Debt issuance has reached over $220 billion year-to-date in 2026, more than double the levels seen in 2025 and a significant increase from 2024.

This boom has led to higher borrowing costs and increased coupons as the market struggles to find buyers for the volume of debt. Broadcom Inc has responded to these needs by establishing a financing vehicle to support the AI infrastructure build-out. However, investors have raised concerns regarding circular financing, where companies provide funds to customers with the expectation that those customers will use the money to purchase the company's own products.

The build-out of mega AI infrastructure facilities faces further complications due to worker and strip shortages, as well as regulatory and community opposition in states including Pennsylvania, New York, and Texas. These delays extend the period companies must carry expensive debt, contributing to overall market volatility. Science and Technology Partners has analyzed these cost of capital and financing structures as the technology market navigates the surge.