BIS bulletin examines AI boom financing shift to debt
A new Bank for International Settlements (BIS) bulletin highlights the surging investment in artificial intelligence and the necessary shift from cash flow financing to debt. This transition increasingly involves private credit, according to the January 2026 publication.
AI investment surge drives financing shift
Investment in artificial intelligence is rapidly increasing, both in absolute terms and as a proportion of GDP, contributing significantly to economic growth.
To meet these substantial investment demands, firms are increasingly moving away from funding through operating cash flows towards debt, with private credit playing a growing role in this financing landscape.
Sustainability hinges on earnings expectations
While the AI boom presents moderate macroeconomic and financial stability risks, its long-term sustainability depends on AI firms achieving high earnings expectations.
The bulletin notes a tension, as equity prices have advanced considerably beyond debt market valuations, underscoring the reliance on future profitability.
Source: Financing the AI boom: from cash flows to debt
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