H2 2026 Credit Outlook: The AI Buildout – Boom or Bubble?

Man Group

Sriram Reddy, Jon Lahraoui

Research

16 Pages

Man Group examines how the AI infrastructure buildout is reshaping credit markets, with a focus on whether today’s surge in financing resembles a durable opportunity or a familiar bubble. A striking concern is that AI and hyperscaler issuance could reach nearly US$465 billion, potentially accounting for almost 20% of total issuance.

Key Takeaways

AI Issuance Explosion: AI and hyperscaler related issuance could reach US$400 billion in investment grade plus US$65 billion in high yield and loans, approaching 20% of total issuance.
Credit Risk Asymmetry: Four of the five major hyperscalers underperformed the broader credit market on a spread basis in 2026, despite continued enthusiasm around AI investment.
Growing Market Dispersion: Software represents roughly 20% of the middle market direct lending universe, while global high yield defaults are projected around 2%, masking widening credit fragmentation.
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