Moody’s says AI borrowing is pushing private credit beyond corporate lending as refinancing risks rise

High levels of borrowing to fund AI infrastructure are expanding private credit beyond traditional corporate lending, according to Moody’s^3,5. The rating agency said AI financing is driving private credit growth as refinancing risks rise^1,2.

Financing demand linked to AI now reaches beyond data centres, Moody’s Ratings said, broadening private credit’s exposure to the sector⁴. Moody’s described financing features that affect interest payments but add to borrowers’ debt burden^1,2. The agency’s assessment was published on 27 October³.

Why it matters to investors

The assessment ties two of the market’s main concerns together: the cost of the AI build-out and the health of private credit. Borrowing on the scale needed for AI infrastructure is moving private credit into areas outside its traditional corporate lending base³, which changes the risk profile of funds that investors hold.

Refinancing risk is the central warning. Moody’s said those risks are rising as AI financing grows¹. Structures that relieve interest payments in the short term add to debt burdens², which can raise the amount that must be refinanced later.

Recent stress in CoreWeave’s debt has also highlighted investors’ growing concerns². That episode gives a concrete example of how pressure on one AI infrastructure borrower can reach the lenders and bondholders that finance it.

The widening of AI-related demand beyond data centres⁴ means exposure is less concentrated in one asset type. It also makes it harder for investors to see how much of a private credit portfolio depends on the AI cycle³.

What to watch

The first marker is the refinancing calendar for AI-linked borrowers. Moody’s warning that refinancing risks are rising^1,5 puts attention on loans and bonds coming due.

The second is CoreWeave. Stress in its debt has already shaped investor sentiment², and further developments there would be read as a test of the wider sector.

The third is how far AI demand spreads into other parts of private credit. Moody’s said the financing now reaches beyond data centres⁴ and beyond traditional corporate lending³. Any further broadening would increase the share of private credit tied to AI spending and to the debt burdens that the agency described¹.

Moody’s linked the growth of AI financing in private credit directly to the rise in refinancing risks^1,2, so the pace of new AI borrowing will be read as a measure of that risk as well as of demand.