Hyperscalers are also taking over the eurozone bond market
Summary
- US tech giants Google, Amazon, and Microsoft are becoming significant players in the euro-denominated corporate bond market, with investments projected to exceed 1,000 billion USD by 2028.
- Hyperscalers currently account for about 1% of euro-denominated corporate bond benchmark indices, with their share of new issuances nearing 10%.
- While hyperscalers bring benefits like longer maturities and high credit ratings, risks include market concentration and potential crowding-out effects on European issuers.
- Despite these risks, demand for European bonds remains stable, though hyperscalers' credit spreads are widening due to increased issuance and uncertain earnings outlooks.
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Automatic translation: Originally published in Finnish 10/09/2026, 05:03 GMT. Give feedback here.
US tech giants Google, Amazon and Microsoft have also emerged as significant players in the euro-denominated corporate bond market. The investments of these so-called hyperscalers are estimated to exceed 1,000 billion dollars by 2028, which corresponds to around 3% of the annual US GDP. Investment needs have grown so large that they can no longer be covered solely by internal cash flow, leading companies to increasingly turn to external financing, which is now also being sought from the Old Continent.
I recently read an interesting blog post on the ECB's website that discussed the tech giants' expansion into Europe, not only in terms of data centers but also financing. Hyperscalers account for around 1% of euro-denominated corporate bond benchmark indices, with outstanding loans amounting to around 40 BEUR. Nevertheless, their share of new euro-denominated corporate bond issuance has already risen to close to 10%.
Source: ECB blog
This development has both positive and risk-related aspects. On the positive side, hyperscalers bring longer maturities to the market, expand the weight of the technology sector, and bring high credit ratings, which diversifies the euro area corporate bond market, which is traditionally bank-driven and weighted towards A–BBB ratings.
On the risk side, the concerns are market concentration and a potential crowding-out effect: investor interest in hyperscalers and limited capital could direct funds away from other, particularly European, issuers. However, demand for European company bonds has remained stable so far, and some European issuers have timed their emissions to avoid direct competition with hyperscalers. By contrast, credit spreads for hyperscalers have started to rise due to increased issuance and an uncertain long-term earnings outlook (see figure below). So far, the effects on the availability of financing for other companies and on investor portfolios have been limited, and the upward pressure on long-term interest rates seen in the US has not been observed in the euro area thus far.
However, this may only be the start of an unprecedentedly large wave of financing, the development of which should be closely monitored in the fixed-income market.
