The artificial intelligence-driven borrowing frenzy is pushing American corporations across the Atlantic. With the US bond market severely congested by AI-related funding demands, the volume of debt issued by American firms in Europe is accelerating toward historic highs.

On Wednesday, Amazon completed its inaugural sterling bond issuance, while Uber Technologies made its first appearance in the euro market. In total, six American companies sold debt in Europe that day. According to data compiled by Bloomberg, this marks the highest single-day count of US issuers ever recorded in the European market.

Prior to Wednesday's transactions, American companies had already raised €149 billion (approximately $173 billion) in European debt markets this year, trailing only the full-year record set in 2025. This trend reflects the immense pressure building in the US bond market spilling over to Europe, while also signaling a deeper strategic shift in how multinational corporations approach their financing. Analysts caution that as European markets continue absorbing growing volumes of American debt, the region's valuation advantages may gradually erode.

AI Lending Boom Squeezes US Bond Market, Hyperscalers Seek Alternatives

The congestion in the US domestic bond market stems from explosive capital expenditure demands in the AI sector. Frequent bond issuances by hyperscale tech companies such as Amazon and Alphabet have created a pronounced crowding-out effect on other issuers, with some market participants partially attributing rising US Treasury yields to this activity.

According to Bloomberg, CreditSights analysts including Jordan Chalfin wrote in a client note on Wednesday: "The technical strain in the dollar bond market has become quite painful. Large-scale dollar mega-deals typically carry substantial new issue premiums, pushing yields higher. As a result, hyperscalers are diversifying their funding sources."

Amazon, which completed a $25 billion bond sale last month and has essentially locked in its dollar funding needs for 2026, now views any further dollar issuance as opportunistic. The company's €2.5 billion (approximately $5.8 billion) sterling debut is part of this diversification strategy, and its sheer size immediately places it among the largest borrowers in that market. Earlier this year, fellow hyperscaler Alphabet made a similar move.

European Markets Offer Dual Appeal: Liquidity and Valuation

For American corporations, the attractiveness of European markets spans multiple dimensions. Juan Valencia, credit strategist at Societe Generale, remarked: "It makes sense for companies to raise funds wherever they can find financing." He noted that US firms are actively positioning in "any market that provides good liquidity, and the euro market is the best alternative to the dollar."

From an interest rate perspective, high-grade borrowers can access financing in the euro market at significantly lower costs than dollar-denominated debt, a critical advantage for multinationals with substantial earnings in the eurozone. However, data compiled by Bloomberg shows that in recent weeks, when euro funding is converted to dollars via currency forwards, the all-in cost is roughly comparable to borrowing directly in the dollar market, partially offsetting the rate advantage.

In terms of valuations, because hyperscaler issuance has historically concentrated in the US market, relative pricing in Europe remains attractive. While the sterling market is less competitive on rates than the euro market, it continues to draw new entrants.

Record Volumes, Yet Modest Share Gains in Europe

Despite the vigorous pace of US corporate issuance in Europe, its share of the European investment-grade market has risen by less than one percentage point compared to early 2025. This is largely because European domestic issuers are also seizing the current window of strong demand for corporate bonds, actively expanding their own issuance volumes.

However, with AI-related capital expenditure forecasts continuing to be revised upward, American companies' debt issuance abroad, particularly in Europe, is expected to persist. Marco Stoeckle, head of credit strategy at Commerzbank, stated: "Ongoing issuance tied to AI infrastructure buildout, along with pre-emptive issuance ahead of the French elections, should have a tangible net impact on the market."

This means investors in European credit markets will face sustained higher supply pressure for some time to come. Striking a balance between yield opportunities and the market's absorption capacity will become a key test of the European bond market's resilience.