According to a warning from S&P Global on Monday, Big Tech may have much more financial exposure related to artificial intelligence than investors might think, especially as concerns grow about the debt underpinning Wall Street’s AI surge.
Tech companies are leaning increasingly on external investors, financial guarantees, and intricate financing schemes to fuel their massive data center growth. These arrangements can carry significant obligations that aren’t always neatly wrapped up in traditional debt disclosures, complicating the picture of who ultimately bears the risk if those much-anticipated AI profits don’t pan out.
Mark Habib, who leads digital infrastructure at S&P Global, pointed out that these tangled financing arrangements could be hiding extra liabilities.
“It’s reasonable to assume there’s more (debt) out there that isn’t visible,” he remarked during a roundtable discussion in London.
S&P estimates that companies like Amazon, Microsoft, Alphabet, Oracle, Meta, and SpaceX will collectively invest over $7 trillion in AI-related capital expenditures between 2025 and 2030. The agency also forecasts that this group will experience negative free operating cash flow in both 2026 and 2027, as their investments will outstrip the money they generate on their own.
According to a Financial Times analysis, tech firms issued up to $300 billion in guarantees tied to AI data centers and chips over the last year. In a separate evaluation, analysts from Morgan Stanley noted that seven major technology companies had accrued over $3.1 trillion in off-balance-sheet commitments, which include leases and purchase agreements.
These commitments don’t exactly equate to $3.1 trillion of actual debt, but they certainly illustrate how companies can take on hefty contractual obligations without listing the total as conventional borrowing.
A case in point is Meta’s Hyperion data center project in Louisiana, where the company partnered with Blue Owl Capital for a venture with development costs nearing $27 billion, retaining a 20% stake.
Meta’s SEC filings revealed initial lease commitments and residual value guarantees of around $12.3 billion, with a threshold of about $28 billion that decreases over time. If the value of the property drops below certain thresholds, the guarantees could trigger payments. However, Meta indicated that such payments were not likely as of December 2025, so they recorded no liability for them.
The financing needed for AI expansion is predicted to grow significantly. Goldman Sachs expects global hyperscaler debt issuance to hit $420 billion by 2027, which is more than a 60% increase over its estimate for 2026. It’s worth noting that hyperscalers only account for about 40% of AI-related credit issuance, suggesting that borrowing in this sector goes beyond just the big-name tech companies.
Concerns are particularly evident at CoreWeave, an Nvidia-supported provider of computing infrastructure.
CoreWeave has amassed an estimated $50 billion in debt, as reported by Reuters, with some of its bond yields soaring to around 15% to 16% last week, indicating that investors are seeking higher returns for lending to the company.
Interestingly, Microsoft represented about 67% of CoreWeave’s projected revenue for 2025, showcasing how heavily infrastructure providers can rely on funding from a small number of tech companies.
Microsoft’s financial ties extend to OpenAI and Anthropic, two leading AI developers. The company has made commitments as high as $13 billion to OpenAI and up to $5 billion to Anthropic. Both firms also depend on Microsoft’s cloud services, with OpenAI agreeing to procure an extra $250 billion in Azure services, while Anthropic has committed to $30 billion, according to various agreements. Microsoft integrates their AI models into its offerings, establishing a mutually beneficial financial relationship. Amazon continues to be Anthropic’s main cloud provider.
Major investment firms like Blackstone, BlackRock, and Carlyle have been involved in financing CoreWeave’s growth. In an October report, Carlyle noted that private credit might be needed to fund roughly $1 trillion in AI infrastructure, which could lead to considerable concentration risks across investment portfolios.
The financial networks also connect back to Nvidia. The chipmaker agreed to buy up to $6.3 billion in unsold computing capacity from CoreWeave through 2032. According to analysts from Bank of America, Nvidia’s broader financial commitments across the AI sector amount to about $230 billion. Again, while these aren’t all outstanding debts, they connect Nvidia’s finances to the companies using its chips.
The sustainability of this industry-wide borrowing ultimately hinges on the revenues generated by these investments. Bain & Company suggests that the AI sector will require around $6 trillion in annual revenue by 2031 to support the anticipated infrastructure investments. However, identifiable consumer and enterprise AI applications currently have the potential to generate only between $1.2 trillion and $1.8 trillion annually, according to Bain’s estimates, leaving a staggering $4.2 trillion in additional annual revenue that must originate from new products and services.
This financial strain is already impacting credit ratings. S&P downgraded Oracle to BBB-, the lowest tier of investment-grade ratings, back in July, citing the extensive capital demands of its AI infrastructure initiatives, alongside declining cash flow and unsure profitability. The agency also pointed out risks from Oracle’s reliance on large clients, especially OpenAI, whose capability to meet substantial commitments is partly contingent on ongoing AI demand and financing.
Habib mentioned on Monday that S&P currently doesn’t perceive a significant disconnect between market valuations and its credit ratings that would warrant extensive revisions. However, an uptick in investments or stiffer competition could alter the agency’s view on the sustainability of spending within the industry.
