Tech Giants Hide $47 Billion AI Debt Off Balance Sheets as Analysts Warn of Bubble Behavior
Summary
Major tech giants Meta and Oracle secretly accumulate $47 billion in hidden AI debt through off-balance-sheet financing schemes reminiscent of subprime mortgage crisis tactics, prompting analysts to warn of dangerous bubble behavior as companies gamble on unproven AI returns.
Key Points
- Tech giants like Meta and Oracle are borrowing heavily through private debt markets and special purpose vehicles to fund AI infrastructure, with Meta seeking $29 billion and Oracle issuing $18 billion in debt
- Companies are moving AI-related debt off their balance sheets to hide the true scale of borrowing from shareholders and credit rating agencies, similar to tactics used during the subprime mortgage crisis
- Market analysts warn this leveraged AI spending represents bubble behavior, as profitable tech companies acknowledge they cannot guarantee returns on massive AI investments but continue spending to stay competitive