U.S. tech giants' off-balance-sheet debt from artificial intelligence-related obligations has ballooned to $3.2 trillion in just six months, sparking alarm among investors. According to a Nikkei analysis of earnings disclosures from Alphabet, Microsoft, Amazon, Meta, and Oracle, this hidden debt—comprising unfulfilled purchase commitments and lease agreements—represents about 80% of their combined assets.
Google holds the largest amount at $1.05 trillion, while Meta's obligations reached $810 billion. To secure computing power, these giants are signing multi-year contracts with suppliers and leasing data centers from startups like Core Weave. For instance, Meta agreed to purchase $21 billion of cloud capacity from Core Weave, which also benefits from the tech giants' creditworthiness.
However, the rapid spending is outpacing cash generation; Google reported a capital investment deficit for the third consecutive quarter, directing more cash into data centers than it generates from its core business. With interest rates rising and shares of Alphabet, Amazon, and Oracle declining after signaling continued expansion, the sustainability of this off-balance-sheet infrastructure boom is under intense scrutiny as the AI industry relies on a complex web of long-term commitments.
Source: Hacker News · Summarized by HeadlinesBriefing