US life insurers’ investment exposure to the artificial intelligence sector spiked in the first half of the year and is expected to keep growing, according to a report by Moody's Corp.

US life insurers held about $85.2 billion in investments related to AI at the end of June, up 24 per cent from the end of 2025, according to the report. These holdings include hyperscalers, data centres and chip manufacturers.

Moody's analysts define hyperscalers as the five US companies leading the AI buildout: Alphabet, Amazon, Meta Platforms, Microsoft and Oracle. Life insurers held roughly $32.2 billion of their debt at the end of June, an increase of 21 per cent from year-end. That represents about 6.6 per cent of the hyperscalers’ outstanding debt.

While the insurance sector’s total exposure to AI investments remains low, at 1.4 per cent of its cash and invested assets, the figure may understate its total indirect exposure, according to the report. Investments backed by hyperscalers through guarantees and leases add exposure that is not reflected in direct holdings, for example.

The analysis also didn’t include investments in some companies whose performance is “highly correlated to the AI ecosystem” and whose credit quality could weaken if spending on AI slows down.

Insurers’ exposure to debt backing the digital infrastructure that supports AI jumped 34 per cent, reaching $39.5 billion at the end of June. These include project financing deals for data centres, graphics processing units and tensor processing unit equipment.

While most of those holdings are investment grade, Moody's analysts note that the share of bonds falling into the junk category ticked up from 4.7 per cent to 6.1 per cent.