Big Tech keeps $300B in AI debt off balance sheets

Major technology companies have issued roughly $300 billion in financial guarantees over the past year to fund artificial intelligence data centers and chip procurement, recording only a fraction of that exposure on their balance sheets, the Financial Times reported Sunday.ft

The practice, employed by Alphabet ↗ 0.21%, Amazon Amazon.com, Inc. ↗ 1.00%, Meta ↘ 2.43%, Microsoft ↘ 0.80%, and Oracle ↘ 1.98%, allows the firms to leverage their credit ratings to lower borrowing costs for AI infrastructure projects while keeping the associated liabilities largely confined to financial footnotes.startupfortune+1

How the Structures Work

The guarantees function as contingent liabilities under current accounting rules, meaning companies report only their modeled probability of loss rather than the full amount pledged. Alphabet's data center lease guarantees, for instance, jumped from $16.9 billion to $43.8 billion in six months this year, yet less than 2% of that figure appears as a liability on its balance sheet, according to the Financial Times.startupfortune+1

In one arrangement detailed in the report, Alphabet guarantees lease payments for Fluidstack, an AI cloud provider that builds data centers stocked with Google's TPU chips and rents capacity to Anthropic. The guarantee lets lenders finance the buildout at lower rates, while Alphabet books the obligation as a credit derivative and records only an estimated $815 million in probable losses against the full $43.8 billion exposure.startupfortune

Nvidia ↗ 1.34% has committed $105 billion in guarantees for an Energy and SoftBank data center campus in Ohio intended for OpenAI, according to the Financial Times. Nvidia carries no liability on its balance sheet until OpenAI's leases begin in 2028.tradersunion

Meta, meanwhile, structured its $50 billion Hyperion data center in Louisiana through a special purpose vehicle majority-owned by Blue Owl Capital ↘ 1.20%, with roughly $27 billion in loans from Pimco, BlackRock ↗ 1.50%, and Apollo ↘ 0.07% that never appear on Meta's own books.startupfortune

The Broader Debt Picture

The $300 billion in guarantees represents only one layer of a larger phenomenon. A Wall Street Journal analysis published in August found close to $3 trillion in total AI-related off-balance-sheet commitments across nine major tech and chip firms, nearly five times their combined reported capital expenditure. Moody's flagged the trend in July, warning that combined 2026 capital expenditures across the major hyperscalers would hit $785 billion and approach $1 trillion by 2027.unboxfuture+1

Credit rating agencies say they account for guarantees in their leverage assessments even when accounting standards allow them to remain off the balance sheet. But the gap between footnote disclosures and headline debt figures has fueled debate over whether current GAAP standards adequately capture the financial risks of the AI buildout.whysogeek+2

Miners Join the Infrastructure Rush

The scale of data center financing extends beyond the hyperscalers. CleanSpark ↗ 8.39% priced $2.276 billion of 7.875% senior secured notes due 2031 on September 18, with proceeds earmarked for its Sandersville, Georgia campus, which is designed to serve both Bitcoin ↘ 1.12% mining and high-performance compute workloads. The offering, expected to close September 25, reflects a broader shift as Bitcoin miners position their powered land and infrastructure to attract AI and cloud computing tenants.tradingview+2