Bank of America warned that the period of "easy money" from betting on AI capital expenditure is ending as investors increasingly avoid speculative projects. This shift follows the issuance of approximately $55 billion in high yield bonds this year, which has spread debt into broad bond funds tied to Google, Meta, and Nvidia. US lawmakers are monitoring the buildout for systemic risks to the financial system, while some observers highlight as much as $180 billion in backed debt for infrastructure linked to Nvidia and Broadcom.
Tuesday, October 20, 2026
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SMBC and MUFG Pull Back From Dominant Role in AI Data Center Loans
AI13 days ago
The primary banks funding the artificial intelligence sector are curbing their credit appetite and demanding stricter covenants as the market for data center debt tightens. Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Banking Corp (SMBC) have begun pulling back from the megaprojects they previously anchored, such as those for CoreWeave and the Stargate project. In 2025, MUFG participated in 15 of the 25 largest data center deals and SMBC was in seven, but new developments now face higher borrowing costs and more selective lenders who require greater compensation for construction risks.
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