Investment firm KKR has warned that roughly $600 billion in AI-related debt, about 6 percent of the US investment-grade bond market, could pose serious risks if data centres, power grids or AI chips fail to meet expectations.

Christopher Sheldon, KKR’s co-head of credit and markets, described it as an unusually concentrated investment cycle, with tech firms projected to invest nearly $8 trillion in AI infrastructure by 2030.

Hyperscalers have issued about $250 billion in debt in 2026 alone as they race to fund AI infrastructure. Goldman Sachs tracked nearly $500 billion in AI-related debt sold through early August, up from barely 1 percent of issuance in 2024.

Lenders are already demanding tougher terms: higher yields, stricter safeguards and funding milestones before cash flows. The Bank of England has also flagged the rapid rise in AI-related debt issuance as a financial-stability risk.

With five issuers accounting for more than half of the AI bonds held by 31 companies, analysts warn that any stumble in AI revenues could hit credit markets hard and trigger downgrades for some of the tech sector’s biggest names.