Data center junk bonds hit $37B in 2026, nearly half of all issuance
What's the deal? Data center developers and neoclouds raised $37 billion in junk bonds to finance US data centers this year — more than four times the 2025 total. That is nearly half of the $80 billion in data center bonds issued so far in 2026, a sharp shift from last year, when junk made up just $8.6 billion of $36 billion raised.
Why now? The surge tracks the race to build AI infrastructure, with developers tapping high-yield markets to fund construction. A Forbes analysis of FactSet data found the bonds finance 16 projects leased to or backed by Amazon, Meta, Nvidia, Oracle, and Jane Street, alongside fast-growing neoclouds such as CoreWeave and Fluidstack.
What could go wrong? Investors are already pulling back. Average yields on these bonds climbed to nearly 10% in a single week, and about $4 billion of CoreWeave's corporate debt is trading below 80 cents on the dollar.
Three developers backed by Nvidia, SoftBank, and Blackstone — Firmus, SB Energy, and AirTrunk — shelved planned IPOs amid the conditions. Lawyers, economists, and investors warn the neocloud financing model resembles WeWork before its collapse.
The bigger picture: Columbia Business School professor Stijn Van Nieuwerburgh examined the surge in high-yield debt behind the AI buildout for the Forbes analysis. Chamath Palihapitiya and Social Capital have amplified the junk-bond figure on X, framing it as a warning sign for the sustainability of AI infrastructure financing. It's a direct continuation of the credit stress flagged on 15 October, when Allianz CIO Ludovic Subran called the data-centre bond selloff a “Darwin moment” for the weakest credits.
The signal: The rise of junk-rated debt shows how much of the AI buildout now rests on riskier credit. With yields climbing, IPOs shelved, and comparisons to WeWork mounting, the financing model underpinning the boom is facing its first real stress test.
Read more: Forbes
Image credit: Wikimedia Commons
