What happened
Alphabet, Amazon, Meta, Microsoft, and Oracle have accumulated $1.65 trillion in off-balance-sheet debt, an eightfold increase over four years, as they race to build data centres. Nikkei reported these figures after analysing financial statements, with Morgan Stanley and Moody's independently highlighting the issue.
Why it matters
This substantial, less transparent debt shifts financial risk onto future earnings, impacting investor confidence and procurement strategies. The $1.65 trillion off-balance-sheet liability, largely from long-term leases and purchase agreements, creates a significant financial overhang for hyperscalers. This follows earlier reports of Big Tech borrowing hundreds of billions for AI capital expenditure, indicating a sustained, aggressive infrastructure buildout. Financial analysts and CTOs must now factor these commitments into valuation models and long-term infrastructure planning, as they complicate risk assessment and could strain cash flows if AI demand underperforms.
