{"id":1179057,"date":"2026-08-31T14:24:18","date_gmt":"2026-08-31T14:24:18","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1179057\/"},"modified":"2026-08-31T14:24:18","modified_gmt":"2026-08-31T14:24:18","slug":"eu-pension-funds-buying-into-us-ai-boom-despite-ecb-risk-warnings-euobserver","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1179057\/","title":{"rendered":"EU pension funds buying into US AI boom, despite ECB risk warnings \u2013 EUobserver"},"content":{"rendered":"<p class=\"wp-block-paragraph\">European pension funds and insurers are increasingly financing the US artificial intelligence boom, buying long-dated bonds that credit rating agencies regard as safe.<\/p>\n<p class=\"wp-block-paragraph\">Hyperscaler debt \u201cmay look like a possible alternative to some safe-haven style securities\u201d, ECB analysts wrote in a <a href=\"https:\/\/www.ecb.europa.eu\/press\/blog\/date\/2026\/html\/ecb.blog20260831~dac6a37e73.cs.html\" rel=\"nofollow noopener\" target=\"_blank\">blog<\/a> on Monday (31 August). <\/p>\n<p class=\"wp-block-paragraph\">But they also warned that these bonds could become less safe as AI companies continue to take on more debt in the coming years.<\/p>\n<p class=\"wp-block-paragraph\">Hyperscaler debt refers to corporate bonds and loans issued by <a href=\"https:\/\/euobserver.com\/4089\/big-tech-lobbying-of-brussels-now-e151m-a-year-new-study-finds\/\" data-type=\"post\" data-id=\"4089\" rel=\"nofollow noopener\" target=\"_blank\">Big Tech companies<\/a> such as Microsoft, Meta, Google, Amazon, and Oracle to finance massive costs of building AI and cloud infrastructure.<\/p>\n<p class=\"wp-block-paragraph\">Ratings may be based on \u201cassumptions on future revenue growth and leverage which may not stand the test of time\u201d, creating a risk of \u201cmispricing of credit risk,\u201d the ECB\u2019s financial experts wrote.<\/p>\n<p class=\"wp-block-paragraph\">Large European institutional investors, primarily pension funds and insurers, looking for safe places to park large sums for long periods, have traditionally bought sovereign bonds \u2014 German ones in particular.<\/p>\n<p class=\"wp-block-paragraph\">But US tech giants looking for ever more sources of finance have started to issue corporate bonds with long maturities, often longer than 15 years, especially attractive to such investors.<\/p>\n<p class=\"wp-block-paragraph\">Just five companies, Alphabet, Amazon, Meta, Microsoft and Oracle, accounted for 15 percent of the growth in euro-denominated corporate bond holdings by euro area investors in the year to March 2026, according to the ECB blog.<\/p>\n<p class=\"wp-block-paragraph\">Buying up large amounts of long-dated corporate bonds might crowd out demand and push up yields for government debt.\u00a0<\/p>\n<p><a href=\"https:\/\/euobserver.com\/218367\/why-eurobonds-will-never-fly-without-credible-fiscal-enforcement\/\" rel=\"nofollow noopener\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"400\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/08\/image_6483441-600x400.jpg\" class=\"attachment-thumbnail size-thumbnail wp-post-image\" alt=\"\"  \/><\/a><\/p>\n<p class=\"wp-block-paragraph\">There are already signs this has already happened in the US but so far the ECB experts found no signs of such spillovers taking place in the euro area.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"European pension funds and insurers are increasingly financing the US artificial intelligence boom, buying long-dated bonds that 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