Unconstrained strategies: keeping an eye on AI

L&G’s Matthew Rees, Enda Mulry, Amélie Chowna and John Daly outline how unconstrained bond investors can navigate a looming wave of AI-linked issuance and its spread implications.

• Hyperscalers could spend ~$7tn in AI capex by 2030, implying $500–800bn in extra debt issuance annually.

• Record tech issuance is already pressuring spreads: the US IG tech index has lagged US aggregate credit since May 2025, with ~$100bn tech debt issued in Q4 2025 alone.

• L&G stays cautious on IG credit at compressed spreads, preferring subordinated bank debt and selective EM exposure where fundamentals look comparatively stronger.

Explore the full article for funding scenarios, primary/secondary opportunities and the case for active credit selection.