Banks Hedge Rising Exposure As AI Debt Soars

Banks are helping finance enormous AI-driven data-center projects but are offloading much of the rising credit risk as debt issuance explodes. Oracle, Meta, and Alphabet’s massive bond sales pushed 2025 global issuance above $6.46 trillion, and companies now plan over $5 trillion in AI-infrastructure spending. To avoid concentrated exposure, lenders are shifting risk to investors through credit derivatives, credit-linked notes, and significant-risk-transfer deals. Banks and private-capital firms are developing new hedging tools as hyperscaler borrowing surges and single-day bond sales hit $30 billion.