Could the AI boom make borrowing more expensive in Europe?

ملخص مفصل

France, Germany and Italy face a volatile bond market as war inflation bites. With US tech giants now issuing billions in AI bonds, they are competing with cash-strapped European governments.

With more than $1 trillion (€900 billion) pouring into the artificial intelligence (AI) buildout, US tech giants are now competing with governments and companies in Europe for the same investment capital.

Four of the Big Five hyperscalers — Amazon, Google owner Alphabet, Meta and Oracle — have issued about $250 billion in bonds in dollars since the beginning of 2025, according to a tally of filings to US financial regulators by AI Industry Reviews, an independent platform that evaluates AI tools. They have sold a further €37 billion ($41 billion) of bonds in euros.

Recently, Microsoft, the last of the Big Five to hold back, joined the AI borrowing spree with a $25 billion bond sale, all in dollars.

Next year, Goldman Sachs projects that total new AI hyperscaler bond sales are expected to reach $420 billion. About €60 billion will be issued in euros, according to Dutch bank ING.

That is unwelcome news for European companies and countries like France, Germany and Italy, whose sovereign bond yields have risen sharply in recent months and are already straining public finances.

With public debt at 119% of gross domestic product (GDP) and a deficit still running above 5%, France is already paying a sizable risk premium on its debt. Over the past six months, yields on French 10-year bonds have climbed from roughly 3.7% to nearly 5%.

The French government's interest bill is set to rise from €79 billion currently to €91 billion next year and over €100 billion by 2028.

Based on these figures alone, France's Finance Ministry needs to find tens of billions of euros in additional cuts, tax hikes, or more borrowing by the end of the decade.

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