Morgan Stanley data center loans leveraged finance hyperscaler issuance AI
Morgan Stanley $MS is pitching data center developers on the leveraged finance market, the channel used for buyouts, as banks race to fund AI. It expects ~$20B of AI-related leveraged finance deals in 2026 and $250B-$300B in hyperscaler issuance. Per The Information.
The race to finance the AI infrastructure boom is pushing Wall Street into new corners of the debt market. According to reporting by The Information, Morgan Stanley $MS, one of the most active banks in lending to data center developers, is now pitching some of those same clients on raising money through the leveraged finance market, a channel better known for funding corporate buyouts. The move reflects how large the capital need has become as companies build the power-hungry computing capacity that AI requires. The scale is striking. Morgan Stanley expects about $20 billion of AI-related deals to flow through leveraged finance markets in 2026. Looking more broadly, it projects $250 billion to $300 billion of debt issuance this year from the hyperscalers, the tech giants such as Microsoft $MSFT and Meta $META, along with the joint ventures they are forming to build out data centers measured in gigawatts of power use. Morgan Stanley is not alone. Banks including JPMorgan $JPM, Bank of America $BAC, SMBC and MUFG are working to distribute and reduce the risk of large data center loans, including financing tied to Oracle $ORCL projects. Morgan Stanley has said it expects credit markets across unsecured, structured and securitized instruments, in both public and private domains, to be central to funding the next wave of AI investment. These figures come from The Information's reporting.