(Bloomberg) — For leveraged finance practitioners, artificial intelligence is the only game in town — especially in the absence of more debt deals to finance mergers and acquisitions.
The trillions of dollars needed to fund the technology’s data centers and power infrastructure dominated discussions last week at Goldman Sachs Group Inc.’s 11th annual leveraged finance and credit conference in Dana Point, California.
More than 400 investment executives and 85 borrowers including American Airlines Group Inc. and Caesars Entertainment Inc., as well as AI adjacent companies like Applied Digital Corp. and Cipher Digital Inc. descended on the Waldorf Astoria’s Monarch Beach resort. AI hype kept the mood buoyant despite lingering anxiety over a tepid M&A return, higher interest rates and the Iran conflict.
The numbers backing the AI complex are staggering. Companies have raised more than $20 billion in the US junk-bond market in the last two months alone, while blue-chip firms look overseas to widen access to financing. In one of the market’s most striking developments, Apollo Global Management Inc. and Blackstone Inc. are corralling more investors into a $36 billion deal to help AI infrastructure build out by Anthropic PBC, which said separately on Monday it confidentially submitted draft paperwork for a public listing.
“There’s such an enormous capex need across data centers, power, chips, that is so large that it really touches every market that we are involved in,” Miriam Wheeler, Goldman Sachs global head of leveraged finance, said in an interview. “For our capital solutions group right now, AI is probably the number one theme that we’re spending time on.”
Presently, most corporate bonds issued for AI facilities trade at near-identical levels. However, as supply saturates the market, bankers caution a sorting mechanism is coming. If borrowers miss construction targets for their data centers, for example, their bond pricing will begin to diverge.
“You’re going to get to a point where those that lag on execution will see that in their cost of capital,” Chris Bonner, Goldman’s head of leveraged finance for the Americas, said in an interview. It’s “staggering” just how much money continues to be needed in the AI ecosystem, he added. “I don’t see that slowing down anytime soon.”
Despite the AI euphoria, Wall Street is still clamoring for a return to traditional M&A. While landmark debt deals like the takeover of Electronic Arts Inc. and Paramount Skydance Corp.’s planned acquisition of Warner Bros. Discovery Inc. have added to supply, a consistent flow of transactions remains elusive.
“We’d all like to see a bit more issuance,” Bonner told the conference’s audience during his opening remarks.
The hunger for non-AI deals made Caesars announcement that it agreed to be acquired by Fertitta Entertainment Inc. a big talking point. Goldman and Morgan Stanley are co-leading the $5.7 billion transaction, supported by eight other banks. Caesars Chief Financial Officer Bret Yunker even attended the conference, fielding investor questions in private meetings.
There was plenty more networking on the sidelines. Before formal proceedings began, some conference goers attended an unaffiliated event hosted by Houlihan Lokey at the Waldorf Astoria’s Bourbon Steak restaurant and bar. Goldman itself had a closed-door soiree, according to people who attended the event.
Inside the main hall, the broader return of private equity dealmaking remained a hot topic for the second consecutive year. Over a lunch buffet of mahi-mahi, crumbed chicken, lemon potatoes and gnocchi, Tim Ingrassia, Goldman’s Co-Chairman of global M&A, addressed the crowd on the dealmaking outlook. Corporate M&A and large buyouts are currently sustaining the market, while mid-sized private equity transactions remain sluggish.
Still, bankers remain characteristically optimistic that the tide is turning.
“The debt markets are certainly constructive, both in terms of size and pricing, maybe with a small asterisk for the rate move over the last week or so, but we think that that backdrop is certainly conducive to more deal activity,” Wheeler said.
More stories like this are available on
©2026 Bloomberg L.P.