BlackRock Says Hyperscalers Need Private Credit to Fund AI
Companies building artificial intelligence infrastructure will increasingly seek financing from private credit, Jean Boivin, head of the BlackRock Investment Institute, said Tuesday (July 7).
Speaking with Bloomberg Television, Boivin said that the world will have to “leverage up” due to the amount of investment required for AI infrastructure, and that companies will look to many sources, including private credit, for the capital they need, Bloomberg reported Tuesday.
“The space, the asset class, I think, is going to be positioned for playing an even bigger role,” Boivin said, speaking of private capital, according to the report.
The six largest U.S. hyperscalers are expected to devote nearly $820 billion to capital expenditures this year, a figure that’s almost 80% higher than the record level spent last year, the report said, citing projections from Bloomberg Intelligence.
Three Bank for International Settlements (BIS) economists said in March that banks could be impacted by a trend in which AI hyperscalers are tapping private credit firms to help build AI infrastructure.
Amid the rapid increase in investment in AI infrastructure, hyperscalers have turned to both corporate bond markets and off-balance-sheet arrangements, which are often formed in partnership with private credit firms, the economists wrote in BIS Quarterly Review.
“By channeling sizeable private credit into AI infrastructure, these structures strengthen links between hyperscalers and nonbank investors such as private credit vehicles and insurers,” they wrote. “Banks support the vehicles with funding lines, potentially creating new shock transmission channels — e.g. via refinancing pressures at the vehicle level, procyclical shifts in private credit appetite or the activation of guarantees.”
It was reported in May 2025 that the private credit sector was benefiting from the surge in new AI projects because tech companies need funding to build data centers for their AI models.
That report said that there’s a need for private credit because public-market products can’t cover all the demand and that several tech companies had already tapped private credit.
It was reported Monday (July 6) that institutional investors are pumping billions of dollars into private credit as smaller retail clients depart from the sector as returns decline though remain respectable.
