Big Tech companies like Google and Meta are leveraging their balance sheets to provide financial backstops for unproven AI companies, enabling them to secure cheaper debt financing for data centre construction. This strategy allows companies such as Tera Wulf to raise significant capital, like over $3bn in bonds, with relatively low interest rates, despite having minimal revenue.

These agreements benefit both parties. Big Tech firms gain influence and secure demand for their AI-related hardware, like Google's TPUs, and access to AI services from clients like Anthropic. Conversely, AI companies and data centre operators can access much-needed funding at favorable rates, with guarantees reducing risk for lenders.

This financial engineering, however, carries risks. If the projected revenues from AI technologies fall short, it could impact all involved parties. While Google's substantial cash reserves could absorb minor losses, a significant underperformance could damage its reputation and strategic interests in the AI sector.