Prudence or handicap? ECB data shows Europe isn’t borrowing to fund AI

The European Central Bank (ECB) has revealed that firms operating inside the bloc are financing their artificial intelligence investments without taking on debt at the level as the US, where AI infrastructure leans on trillions of dollars in borrowed money.

The ECB revealed those findings in the “How firms plan to finance AI investment” post the central bank published on October 2 using data from the central bank’s Survey on the Access to Finance of Enterprises (SAFE). 

The survey now raises questions about whether observers should be concerned that euro area firms, which already spend far less than their American counterparts, are also declining to close the gap by borrowing. 

America is funding AI boom with borrowed money

The five largest US tech companies hold $1.65 trillion in hidden debt and $1.35 trillion of debt on their balance sheets, per a Nikkei study cited by Fortune. That figure represents a roughly eightfold jump in just four years.

A separate Moody’s estimate put off-balance-sheet deals at $1.2 trillion, with more than $820 billion of that total committed to data centers that are not even ready yet. 

Firms are also taking on debt to fund long-term obligations such as chips, servers and leases with data-center operators. 

Hyperscalers and related names such as Nvidia have issued $225 billion in bonds in 2026, per S&P Global, a 973.7% jump as of the middle of the year. That number is projected to be near $400 billion by the end of the year. 

Goldman Sachs expects hyperscaler debt to continue to grow by another 60% in 2027, projecting it to hit a new $420 billion record by the end of the year.

Funders are not as hot on AI debt as before 

The scale of the borrowing has started to draw scrutiny in certain corners on Wall Street. That pattern is starting to form too. As of September, the market for top-rated corporate credit banks and industrial is gaining pace while similar offerings from AI-linked issuers are moving in the opposite direction. 

“We’re being very selective in terms of how we invest within hyperscaler debt,” Colby Stilson, head of fixed income at Brown Advisory in London, told Reuters. 

Apollo Global’s Torsten Slok confirmed the scale of the shift in demand, reporting that investor orders per dollar of hyperscaler bonds had fallen below two times as of July from nearly five times in February.

Europe still needs to make up computing ground 

Europe’s reluctance to borrow runs headlong into its investment problem. Oxford Economics projects US corporate spending on AI hardware and infrastructure will grow 40% in real terms between 2021 and the end of 2027, against just 12% for the euro area, figures reported by Cryptopolitan in August. 

The Bank for International Settlements has warned the US pace could end in an “investment bust,” but the lag still worries European economists.

Former ECB President Mario Draghi laid out the stakes in a Financial Times column in September, arguing the European Union hosts under 5% of the world’s AI compute capacity against 75% for the United States, and that the shortfall between demand and installed supply could widen to 14 gigawatts by 2030. 

“Being cut off from AI, once the economy runs on it, would be more like being cut off from the US financial system. The effects would be catastrophic,” Draghi wrote. His proposed fix is for European firms to pool their buying power into contracts large enough to finance new data centers.