Five US Tech Giants' Hidden Debts Soar to $1.65T on Opaque AI Funding
A Nikkei study reveals that hidden debt at five major US tech giants has exploded eightfold in four years, reaching $1.65 trillion. Driven by massive artificial intelligence investments, these off-balance-sheet liabilities from data center leases and GPU contracts now exceed actual debt, making it increasingly difficult for investors to assess true financial risk.
Hidden debt at U.S. tech giants swelled eightfold in roughly four years to an estimated $1.65 trillion as artificial intelligence investments ballooned, exceeding actual debt and making it tougher for investors to assess risk.
- darth_avocado
Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.
- mNovak
Archive link:
https://archive.ph/20260720174223/https://asia.nikkei.com/bu...
- King-Aaron
These debts mean nothing if the US government actually views AI technology as being on par with the Manhattan project. They'll just bail them out or nationalise them.
- alwaysanoobie
Oh man,this makes my stomach churn with anxiety.
It's a tough job market out there and it took 4 months to land job offers after being laid off.
I have a competitive offer from Oracle OCI with a team adjacent to this initiative and I am seriously considering it. How long do you guys think it will take to blow up (if it does)
To the experienced devs out there; would you take a 15% less offer from a medium sized company for job security?
- mNovak
On the one hand, these debts may be off the balance sheet, but institutional investors certainly know about them and can reason about the company's valuation. Retail investors may be caught out slightly more.
But on the other hand, these companies are essentially paying for the service of taking the debt off books (by paying the leasing premium to the SPV partners). I guess I'm wondering what they really gain from doing so, if again sophisticated investors can see through the games?
- dvh
To quote the Big short: "I have five houses and a condo."
- dizhn
The whole world's wealth is being siphoned off by these companies. I hope the very probable crash does not happen.
- m101
The banks are not the ones on the hook here - they no longer lend in a meaningful way as first loss lender on many things. If they lend they do so as a senior financing provider to vehicles that provide the financing.
The actual lending is done by private credit institutions that have raised money, sometimes on the order of 10s of billions of $.