AI borrowing's role in private credit growth and refinancing risk

Reuters reports that Moody's Ratings says borrowing for AI infrastructure is expanding private credit beyond traditional corporate lending. Moody's expects spending by the five largest US hyperscalers and CoreWeave to reach nearly $1 trillion in 2027. It warns that loans due from 2027 to 2029 could test weaker borrowers' ability to refinance at higher interest rates. The agency also flags risks from tech companies, chipmakers and AI developers increasingly investing in, lending to and buying from one another.