AI investment, M&A poised to increase corporate financing needs next year

Group 1 - Big tech companies are expected to increase their debt issuance due to investments in artificial intelligence and a rise in M&A activity, with funding needs potentially reaching nearly $100 billion by 2026 for the top five U.S. tech firms [1][2] - Public bond issuance by major cloud-computing and AI platform companies has reached nearly $90 billion since September, indicating a shift from cash reliance to debt financing [2] - There is a significant backlog of announced M&A transactions among investment-grade corporations, currently totaling $175 billion, which is more than double the $75 billion from the previous year [3] Group 2 - Increased activity from private-equity companies is anticipated, with a post-COVID high in the IPO backlog, suggesting greater confidence in bringing assets to market [4] - Investors are not concerned about potential circular financing among large tech and AI companies, as financing is backed by existing assets [5] - Companies issuing debt have diversified cash flows, and their investments represent small components of their overall businesses, indicating no systemic risk [6]