Technology companies are facing significant financial exposure due to their investments in artificial intelligence, according to a warning from S&P Global.
What happened
S&P Global's head of digital infrastructure, Mark Habib, stated that the interconnected financing arrangements used by tech companies could be concealing additional liabilities, making it difficult to determine the true extent of their debt.
Estimates suggest that Amazon, Microsoft, Alphabet, Oracle, Meta, and SpaceX will collectively spend over $7 trillion on AI-related capital expenditures between 2025 and 2030, with negative free operating cash flow projected for 2026 and 2027.
Technology companies have issued significant guarantees tied to AI data centers and chips, with Morgan Stanley analysts estimating that seven major tech companies have accumulated over $3.1 trillion in off-balance-sheet commitments.
The borrowing behind the AI expansion is expected to grow substantially, with Goldman Sachs projecting that global hyperscaler debt issuance will reach $420 billion in 2027, more than 60% above its 2026 estimate.
Concerns over the industry's borrowing have become visible at CoreWeave, an Nvidia-backed provider of computing infrastructure, which has accumulated approximately $50 billion in debt and seen yields on its bonds climb to roughly 15% to 16%.
