July 1, 2026 | 3 Minute Read
Key Takeaway
With estimates of $3T in credit needed to fund AI-related projects through 2030, investors could benefit from partnering with an active manager that has experience investing across all segments of the credit market, supported by an experienced and multi-skilled research team.
AI investment opportunities are bombarding institutional investors from all angles. Knowing how to evaluate issuance across different structures and asset classes is likely to be a key differentiator among asset managers, and we believe PPM is ahead of the game.
Estimates put AI-funding needs for the five-year period through 2030 above $5T.1 This includes over $3T for credit markets across investment grade, high yield and structured products, involving both public and private credit. Case in point, hyperscalers issued over $190B of debt (if you include the recent SpaceX offering) across global investment grade markets during the first six months of 2026. This level of activity could have a significant impact on the performance of credit markets and the ability of active managers to generate alpha.
The AI investment universe is broad, and investors are being asked to assess risk for traditional, unsecured borrowings from hyperscalers, as well as the project-level debt for both specific data center campuses and semiconductor financing. This requires a deep understanding of tenant risk, construction risk, lease structure and debt structure.
In our opinion, many investors are either uncomfortable with this complexity or may not yet have a process to appropriately price the risk. However, PPM has experience investing in solar farms, liquefied natural gas facilities, semiconductor foundries, sports stadiums, aircraft financing and other unique assets. We are applying this same refined process and base of intellectual capital to the AI investment space. Ultimately, we believe this expands our relative value perspective and can enable us to make the best investment decisions for our client portfolios. We view the AI investment cycle over the next few years as a significant opportunity; our goal is to use this issuance as a potential source to generate strong risk-adjusted returns for our clients.
Digital Infrastructure Investment Capabilities
- Team: Several analysts across multiple teams at the firm cover data centers through project finance, asset-backed finance, public investment grade and high yield
- Process: Cross-functionality allows PPM to provide quick feedback and identify key credit and structural features of transactions within one day, with more robust due diligence completed within two to three days
- Market Participation: Frequent reviews of stabilized project finance and asset-backed finance, construction projects and GPU financings. Regularly meeting with data center owners/operators and sponsors
- Expansion Opportunities: GPU/TPU financings, behind the meter power solutions
Up next … in our second blog post on AI issuance coming next week, we take a deeper dive into how our credit analysts approach one example of an AI-related debt deal – the high yield data center construction project.
(1) J.P. Morgan. “AI Capex 2.0.” 16 June 2026.
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Past performance is no guarantee of future results. Investments involve varying degrees of risk and may lose value.
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