Deutsche Bank Warns AI Debt Could Deepen Credit Gaps Among Borrowers

Artificial intelligence debt could widen differences in credit performance across borrowers and weigh more on U.S. investment-grade spreads than European ones, Deutsche Bank said in a Sept. 15 outlook. The outlook linked the pressure to competition for investor capital: U.S. government borrowing needs and bond sales by AI companies are both seeking demand. Deutsche Bank expects AI-related issuance to weigh more on U.S. investment-grade spreads than on European ones. It said company fundamentals and coupon income could limit broad spread increases. The warning about borrower performance applies more broadly than the regional spread comparison. Deutsche Bank identified weaker high-yield issuers as more vulnerable if high interest rates persist and refinancing needs grow. AI financing, the bank said, could widen the gap between stronger and weaker companies.

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