ECB: American Tech Companies' Debt Could Make Borrowing More Expensive in Europe

American technology companies are taking on increasing amounts of debt in Europe to finance large-scale artificial intelligence projects. To do this, they are issuing bonds denominated in euros.

According to the European Central Bank's assessment, if this trend continues, borrowing could become more expensive for other companies and governments.

Tech giants need substantial funds to build data centers and develop artificial intelligence systems. Instead of covering these costs solely from their own revenues, companies are raising part of the necessary funds by selling bonds.

When large American companies issue high-volume bonds in Europe, investors allocate a significant portion of their capital to these bonds. As a result, borrowing could become more expensive for other companies and governments.

In the ECB's view, this process could raise borrowing costs in the eurozone and increase financial risks as well.

Source: Reuters