| Look at how the rapid developments in AI, the expansion of digital finance, escalating cyber threats, and surging demands for data center capacity are set to impact 2026 credit conditions. |
Artificial Intelligence Outlook 2026
Artificial intelligence surged in 2025, with major breakthroughs in model capability, rapid expansion of global AI infrastructure, and increasing enterprise adoption. But this progress comes with drawbacks including infrastructure shortages, regulatory fragmentation, geopolitical pressure, and uneven productivity gains are creating a landscape where AI’s benefits are significant, but unevenly distributed.
Key Highlights:
- Rapid innovation intensifying competition across models: Leading models in the US (GPT‑5, Claude 4.5, Gemini 3) set new standards in reasoning, multimodality, and autonomous task execution. Open source and Chinese models (Qwen 3, ERNIE 5, Hunyuan) narrowed the performance gap, raising questions about long‑term monetization for proprietary players. We see that providers are shifting from standalone models to integrated enterprise AI tool suites.
- Uneven gains in productivity: AI adoption is accelerating, especially in customer-facing and analytical workflows. The largest increases occur in routine, document heavy processes but workflows with more nuances are facing friction. “Winner‑take‑most” dynamics favor big, well‑capitalized firms in industries like consumer goods and financial services.
- Infrastructure constraints and rising costs: Explosive demand for compute is outpacing supply, driving massive multi‑billion‑dollar data‑center expansion, straining global power grids, and inflating costs due to GPU shortages. These pressures risk slowing AI adoption for smaller firms and amplifying the resource advantage of hyperscalers and sovereign-backed players.
- Escalating geopolitical, regulatory, and cyber risks: Fragmented global regulations, from the EU’s AI Act to China’s tight licensing system, are forcing multinationals to maintain region‑specific AI stacks. At the same time, cyber threats like prompt injection and model poisoning are expanding as AI becomes more embedded in workflows, raising governance, security, and compliance demands.
Digital finance in 2026 will be powered by maturing tokenization frameworks, rising institutional use of stablecoins, and increasing convergence across once‑separate financial segments. As blockchain‑based infrastructure becomes more deeply embedded into settlement, collateral, and liquidity management, digital rails are emerging as a foundational layer of global finance. This is set to boost efficiency while introducing new operational, regulatory, and cybersecurity risks that will shape market behavior in the years ahead.
Key Highlights:
- Shared digital technology is integrating previously distinct areas of finance: Blockchain rails and shared digital infrastructure are dissolving boundaries between private credit, sustainable finance, and emerging‑market flows. Tokenized instruments are gaining traction, enabling automated servicing and faster settlement. Stablecoins and DeFi platforms are becoming connective tissue across segments, supporting real‑time liquidity movement.
- Infrastructure development set to determine the transition speed: Major institutions are continuing to pilot tokenization platforms, blockchain settlement networks, and digital custody systems to streamline issuance and operations. Stablecoins backed by cash and Treasurys are increasingly used in cross‑border payments and repo markets, but the broader shift relies on faster, more scalable blockchain rails, stronger custody layers, and resilient cyber protections.
- Digital rails may potentially transform cost structures: Tokenized issuance and programmable settlement reduce manual processing, accelerate liquidity turnover, and lower operational burdens. Real‑time digital cash instruments cut funding and counterparty costs, while coordinated regulatory progress is helping clarify rules around custody, redemption, and disclosures, all crucial for scaling digital finance.
- Markets will consolidate around efficient, secure, and interoperable infrastructure: Regulated stablecoins are poised to gain prominence. Platforms that provide strong interoperability with legacy systems will attract deeper liquidity. As institutions embrace smart‑contract‑driven workflows, the line between traditional finance and DeFi will continue to fade, favoring architectures that combine innovation with compliance, scalability, and resilience.
AI is making traditional attacks even more sophisticated. As organizations continue embedding AI into operations, agentic systems capable of autonomous multi‑step actions introduce new unpredictability and compound risks. This will require faster detection, stronger governance, and more automated defenses to keep pace with attackers.
- Ransomware’s grip is loosening for smaller firms but remains severe for large organizations: Mid‑sized companies have improved detection, backup strategies, and recovery planning, reducing successful encryption rates and limiting operational disruption. Larger enterprises, despite greater investment, remain attractive and vulnerable because of their complex networks and higher ransom‑payment capacity.
- Cryptocurrency theft highlights major security gaps amid rising institutional adoption: DeFi platforms and exchanges suffered significant breaches in 2025, driven by coding flaws, manipulated interfaces, and off‑chain security weaknesses. As institutional participation grows, cybersecurity shifts from a differentiator to a minimum requirement for market access, liquidity, and long‑term viability.
- Cloud outages underscore systemic operational risks: Recent non-malicious outages at AWS, Azure, and Cloudflare revealed the fragility and interconnectedness of global cloud dependencies. Multi-region deployments and hybrid architectures offer more practical resilience than costly full multi‑cloud strategies but require investment and ongoing management as regulators increasingly scrutinize cloud‑concentration risk.
- Global efforts to harmonize cybersecurity rules face slow progress: Companies face an expanding patchwork of overlapping regulations across the EU, U.S., and Asia, creating costly compliance burdens that siphon resources from actual defense. Without stronger coordination, firms will continue to navigate conflicting requirements while attackers exploit gaps faster than governments can close them.
Data center demand will surge in 2026 as AI and cloud workloads expand, with most new capacity pre‑leased by hyperscalers. This ensures rapid monetization but concentrates risk while development is increasingly shaped by power constraints, regulatory hurdles, rising construction costs, shifting financing structures, and the escalating expense of GPUs.
- Double‑digit capacity growth continues with rapid monetization: Global data center capacity is projected to grow sharply—reaching about 600 TWh in 2026—as hyperscalers rapidly energize and absorb new supply. Nearly all major new builds are pre‑leased, driving immediate revenue generation while expanding the AI and cloud infrastructure base. Massive hyperscale sites coming online will accelerate AI model development even as questions about the sustainability of capital intensity grow.
- Regulatory and power constraints limit development: Local resistance and strained power grids are slowing new builds, while regions with supportive policies move faster. Reliable power access remains the critical bottleneck, often requiring dedicated or temporary generation.
- Tenants absorb more risk to speed construction: To shorten build timelines, tenants are accepting risks they once avoided, even as labor shortages and rising equipment costs drive construction and lease rates higher across key markets.
- Capital markets evolve as scale increases: Financing needs are ballooning, drawing in banks, private capital, and institutional lenders. Start‑up AI firms rely heavily on big‑tech credit support, and new financing structures aim to reduce lease‑renewal risk and broaden investor participation.
- High GPU costs drive demand for alternative financing options: GPUs—now the largest cost in AI‑focused data centers—require frequent refresh cycles, pushing developers toward nontraditional financing models and GPU‑as‑a‑service options to support escalating compute needs.
From Outlook to Action: Get More from Moody’s Research Assistant
Moody’s Research Assistant is a GenAI platform designed to streamline access to Moody’s data and research, offering faster insights across geographies and sectors. It helps you analyze trends around growth resilience, policy divergence, trade dynamics, refinancing risks, and more.
Below are tailored sample prompts to help you explore the most pressing themes from Digital Economy 2026 Outlooks:
Artificial Intelligence Prompts:
Prompt: “What are the geopolitical risks to AI supply chains and their credit implications?”
Why is this prompt important? Aggressive AI infrastructure spending can lead to high leverage, delayed revenue realization, and strain on sectors with limited financing flexibility. Companies like Oracle have seen debt outpace EBITDA growth, and structural limits in certain industries may prevent full ROI. Shifts in business models, such as reduced headcount in BPO services, add further disruption risk.
Why try this prompt? It helps identify issuers most exposed to leverage and structural constraints, enabling proactive credit monitoring and stress-testing for liquidity and margin pressure.
Prompt: “What indicators should we monitor to detect an AI investment bubble?”
Why is this prompt important? Key signals include widening gaps between AI capex and revenue, inflated valuations disconnected from fundamentals, speculative financing inflows, and aggressive capacity build-outs without matching demand. Monitoring utilization rates and monetization timelines is critical to gauge sustainability.
Why try this prompt? This supports early detection of systemic overvaluation and informs risk-adjusted investment decisions before valuations correct.
Cyber Risk Prompt
Prompt: “What indicators suggest rising systemic cyber risk in financial markets?”
Why is this prompt important? Systemic cyber risk is escalating as state-sponsored attacks, ransomware incidents, and uneven governance strain financial markets. Aggregation risks in cyber insurance and regulatory fragmentation amplify vulnerability across critical sectors.
Why try this prompt? It integrates the AI output’s key indicators—state-sponsored threats, governance gaps, ransomware trends, and systemic insurance constraints—into a concise, credit-focused framing.
Digital Economy Prompt
Why is this prompt important? Stablecoin liquidity risk depends on governance quality and regulatory clarity. Weak oversight can amplify stress scenarios, similar to prior runs on stablecoins or money market funds, creating systemic vulnerabilities.
Why try this prompt? It helps anticipate liquidity shocks and supervisory gaps that could undermine financial stability and trigger rating actions.
Data Centers Prompt
Prompt: “How will ABS and CMBS issuance trends affect data center liquidity in 2026?”
Why is this prompt important? ABS and CMBS markets are hitting record highs as data center projects refinance initial construction loans. This surge enhances liquidity and provides reliable refinancing options for large-scale hyperscale developments.
Why try this prompt? It helps assess how growing securitization volumes strengthen liquidity and reduce refinancing risk for developers, while revealing investor appetite and structural constraints in a rapidly scaling data center market.
For more prompt ideas and detailed guidance, you can also visit our Research Assistant prompting hub.
As the global economic environment becomes more fragmented and complex, timely analysis and forward-looking perspectives are essential. Moody’s remains committed to providing the insight and tools you need to navigate uncertainty and seize new opportunities in 2026 and beyond. For more research, insights, and forecasts for the year ahead, explore the Outlooks hub.