Citadel Securities is predicting that $500 billion of debt will be issued across public and private markets by 2028 to fund the chips powering artificial intelligence campuses.

Most of the issuance will likely be shorter-term, with maturities of three to five years to align with the lifespan of AI chips, while some could come through Rule 144A private offierings, Bloomberg reported.

Jeff Eason, head of investment-grade desk analyst at Citadel Securities, told Bloomberg that this has the potential to become "one of the largest new sectors in investment-grade credit."

Since last year, the U.S. market has taken in approximately $60 billion of short-term debt with maturities of up to five years from hyperscalers, a fraction of the more than $250 billion Eason expects chip makers to issue in 2028 alone.

Eason added that investors have not experienced this level of financing thus far.

Approximately $570 billion in AI-related debt has been issued across global markets, largely from hyperscalers such as Amazon, Microsoft, Alphabet’s Google, which are all heavily investing in data center expansion, Bloomberg reported.

Should this reshape the investment-grade credit landscape, investors would need to reduce their exposure to sectors such as technology, media and telecommunications in order to create space for the chip-financing debt.

Eason added that the wave of AI financing could do more than fund infrastructure, it could create a new "benchmark sector" while reshaping spreads, portfolio construction and capital application throughout the broader AI ecosystem.

Last month, it was announced that part of a $35 billion financing package backing Broadcom Inc. and Anthropic’s AI infrastructure expansion was expected to begin trading in the secondary market in the coming months, with about $15 billion of the debt projected to be available to investors by early 2027. 

The financing deal uses a special-purpose vehicle to fund custom AI chips that are leased to Anthropic, with Broadcom backstopping payment obligations on senior debt tranches.

In 2024, Citadel announced it was launching high-grade credit. The firm traded roughly $500 billion notional last year, Sam Verberian, global head of credit trading at the firm, noted.

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