Morgan Stanley is pitching data center developers on tapping the roughly $1.4 trillion leveraged loan market as a new source of financing for AI infrastructure. The market, traditionally used for private equity leveraged buyouts, would be redirected toward the funding needs of AI data center construction.
June 2026 · Morgan Stanley
Wall Street Eyes the $1.4 Trillion Loan Market to Fund the AI Buildout
Morgan Stanley is pitching data center developers on leveraged loans—senior debt long used in buyouts—as a faster, more flexible alternative to investment-grade bonds for financing the AI infrastructure surge.
$2.9T
Global data center CapEx, 2025–2028 (~$2.5T AI-related)
$1.5T
Funding gap left after hyperscaler internal cash flow
$3.1B
CoreWeave leveraged loan—an early flagship AI infra deal
The $2.9T buildout, and who pays for it
CapEx 2025–2028 (USD trillions) — blocks scaled to value
$1.4T
Hyperscaler
$1.5T
Funding gap →
How big can AI leveraged finance get?
Estimated AI-related leveraged loan issuance (USD billions)
~$15–20B
2026
~$150B
Next 5 years
Within a ~$1.4–1.5T U.S. leveraged loan market—small today, but growing fast as CLO demand chases stable hyperscaler-leased cash flows.
The Case For
More flexible and faster than IG bonds
Strong CLO manager demand for stable lease-backed cash flows
Institutional appetite seen outpacing supply
The Risks
Higher risk premium for lower-credit developers
CLO investor due diligence is the gating factor
Funding volumes could fall short of expectations
The Incumbent Channel
Investment-grade bonds still dominate—and are accelerating—alongside the new leveraged loan push.
$100B+
Hyperscaler IG bond issuance in 2025
+30–50%
Net debt supply rise in 2026 → ~$130–150B
$50B+
Securitized credit since 2018 (+$150B expected 2025–28)
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