What happened
Major technology firms have shifted from cash reserves to debt financing for artificial intelligence (AI) infrastructure, specifically data centres. US companies have issued $1.7 trillion in investment-grade bonds this year, nearing the 2020 record. JPMorgan projects the AI sector will require $1.5 trillion in debt by 2028, with infrastructure spending potentially reaching $5-7 trillion by 2030. Companies are also employing Special Purpose Vehicles (SPVs) to manage AI-related debt, moving it off their primary balance sheets, which alters traditional financial reporting of these liabilities.
Why it matters
The increasing reliance on debt, particularly through off-balance-sheet Special Purpose Vehicles, introduces a significant visibility gap regarding the true financial exposure and long-term liabilities associated with AI infrastructure investments. This mechanism weakens direct financial oversight, increasing exposure for finance and risk management teams to unquantified future obligations. It also raises due diligence requirements for procurement and compliance departments to assess the financial stability and operational continuity of AI service providers and partners whose underlying infrastructure is increasingly debt-financed.
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