Tech giants are increasingly using off-balance-sheet financing to fund their artificial intelligence ambitions, shifting approximately $120 billion in debt. This strategy involves establishing Special Purpose Vehicles (SPVs) and joint ventures to raise capital without directly impacting their financial health or credit ratings. Meta has secured $30 billion through an SPV, and xAI is seeking $20 billion via an SPV for chip leases.
This approach raises concerns among analysts due to potential hidden liabilities and risks, reminiscent of past financial scandals. While traditionally reliant on internal cash, many tech firms are now issuing debt to fund AI investments. Global tech companies issued $428.3 billion in bonds in 2025. The heavy debt issuance has begun to lift leverage and weaken coverage ratios for some firms, prompting questions about balance sheet resilience if AI investments underperform.
Credit markets are showing increased investor caution, with credit default swap spreads on major tech companies rising. Some analysts view this trend as unsustainable, driven by an overheated market narrative.
