The Zhitong Finance App learned that former British Prime Minister Rishi Sunak said that, driven by artificial intelligence (AI) investment, technology companies are expected to become larger net issuers of long-term debt than the US government in 2027. This judgment highlights that AI capital expenditure is profoundly changing the supply and demand structure of the global long-term financing market.

Capital markets are undergoing major changes: private sector investment in technology is absorbing a portion of long-term financing, which has historically been dominated by sovereign borrowers; this is putting upward pressure on yields at a time when European governments' finances are already stretched.

At the Economic Forum held in New Delhi, Sunak said, “Technology companies are in such a huge demand for capital that it is surprising that if you consider long-term debt, such as next year's debt with a term of 10 years or more, I think technology companies will become larger net issuers of debt than the US government.”

Sunak believes that AI-driven capital expansion is intertwined with another structural pressure: governments in Europe and beyond are struggling to maintain fiscal discipline, and he attributes this trend to the rise of populist politics. He said that these factors have combined to exacerbate the financial challenges faced by European governments.

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