Capital formation replaces innovation as AI's next frontier: a new $85B raise and $1.5 trillion financing gap signal that hyperscaler balance sheets alone cannot fund the infrastructure buildout, forcing debt into utilities, private credit, and securitized markets.

Anne Greenwood, Institutional Portfolio Manager on RBC GAM's BlueBay U.S. Fixed Income team, examines how AI is transitioning from a technology story to a capital markets story, and why this shift matters for fixed income investors navigating the next phase of infrastructure financing.

• AI's capital requirements now exceed what even the most profitable tech companies can self-fund, forcing a migration into investment-grade bonds, utility debt, infrastructure finance, and private credit markets.
• A major technology company’s $85B equity raise signals a fundamental shift where access to capital becomes as critical as access to technology, echoing historical patterns from railroads to fiber networks.
• Fixed income investors face a critical question: will AI monetization arrive fast enough to prevent an overleveraged ecosystem, or are we witnessing the early stages of a new infrastructure debt regime?