Big Tech's Hidden $1.65 Trillion Debt: Why Wall Street Looks Away
Why Wall Street Is Ignoring Big Tech's Debt
A Nikkei Asia report claims the five largest US tech companies carry an estimated $1.65 trillion in off-balance-sheet debt, sparking Enron comparisons. But unlike Enron, this debt isn't concealed through fraud—it's disclosed in footnotes and follows accounting rules. The real issue isn't hidden borrowing but aggressive accounting practices like adjusted earnings and stock-based compensation add-backs. Drawing on research from Aswath Damodaran and others, the video explores whether these tactics actually fool investors and why the bigger risk in the AI boom may be the assumption of enormous future revenues.
The real risk in the AI boom probably isn't the borrowing at all, but the enormous revenue it's all assuming will show up.