Five Tech Giants Hold $1.65 Trillion in Hidden AI Debt

An investigation by Nikkei reveals that Alphabet, Amazon, Meta, Microsoft, and Oracle have accumulated $1.65 trillion in off-balance-sheet debt to fund the construction of AI data centers. This hidden debt has increased eightfold over the last four years and now exceeds the $1.35 trillion these companies officially report on their balance sheets.

The firms use separate legal entities, joint ventures, and GPU purchase agreements to package costs for chips and servers. Under current GAAP accounting rules, these obligations are not recorded as debt until the facilities begin operations and leases are recorded. Meta Platforms Incorporated maintains approximately $420 billion in these obligations, including a joint venture with Blue Owl Capital for its Hyperion data center. Oracle Corporation has seen its liabilities grow thirtyfold in four years, largely to support compute needs for OpenAI.

Financial institutions and analysts have flagged the risks of this shadow borrowing. The Bank for International Settlements, Moody's, and S&P have warned of stretched leverage, and S&P has already downgraded Oracle Corporation's credit rating. Analyst Michael Burry suggested that these structures, combined with potentially understated equipment depreciation, mean Big Tech balance sheets are more leveraged than public figures suggest. The five companies declined to comment on the findings.