Big Tech Faces $330B in AI, Software Debt Through 2028

Major technology firms face roughly $330 billion of pandemic-era AI and software debt that matures through 2028, with about $142 billion coming due in 2028, according to analysis of corporate maturities. That debt sits inside a broader $3.6 trillion global refinancing schedule for the coming years.

The 2028 peak includes about $65 billion in high-yield bonds and roughly $77 billion in leveraged loans. The number of maturities in 2028 is nearly three times the 2026 level. Many software-heavy borrowers issued this debt when interest rates were near zero.

Several companies are already planning refinancing in the second half of this year, indicating the repayment and repricing cycle will begin well before 2028. Refinancing will move those loans and bonds from near-zero coupons or low fixed rates into a higher-rate market.

Most of the pandemic-era financings were raised through high-yield bonds, leveraged loans and debt linked to business development companies. Leveraged loans typically carry floating rates tied to benchmark yields; high-yield bonds pay fixed, higher coupons to compensate for lower credit ratings.

Global interest rates and tighter credit conditions have raised borrowing costs. Real interest rates are roughly six percentage points higher than before the pandemic. Companies that replace maturing debt will face higher interest expenses when they refinance.

The International Monetary Fund projects global public debt will reach about 99% of world GDP by 2028, with stressed scenarios pushing that toward 121% within three years. The IMF also highlighted the United States fiscal path, noting about $39 trillion in national debt, a near-term deficit around 7.5% of GDP, and projections that public debt could exceed 125% of GDP this year and reach about 142% by 2031.

An IMF official warned, “These are signs that markets are not as sanguine, as forgiving, as they were in the past. This cannot wait forever.”

The IMF pointed to higher spending and weaker revenues versus pre-pandemic trends as drivers of deteriorating fiscal positions. On energy support, the IMF said broad subsidies can strain budgets and shift costs elsewhere, commenting, “They distort price signals, are fiscally costly, regressive, and hard to unwind.” Era Dabla-Norris, director of the IMF’s Fiscal Monitor, noted that governments have been more restrained than during the 2022 energy shock but that fiscal space is tighter now.

For lenders and investors, the concentration of tech maturities in the same year increases the chance that many borrowers will seek refinancing at higher spreads at the same time. That timing could raise funding costs across corporate balance sheets and affect firms’ cash allocation, including interest payments, capital spending, hiring and share buybacks.

Background: high-yield bonds are debt securities issued by companies with lower credit ratings and pay higher interest to investors to compensate for greater default risk. Leveraged loans are bank-originated loans to companies with substantial existing debt and often carry floating rates tied to market benchmarks.