Big Tech doubles debt, $350 billion for AI data centers
Big Tech giants like Alphabet, Amazon, Meta, Microsoft, and Oracle have doubled their debt, adding $350 billion over the past five years, all to fuel massive investments in AI data centers.
These next-generation facilities are essential for building smarter AI but come with hefty price tags thanks to expensive chips and bigger infrastructure needs.
Investor demand for tech bonds cools
Investors have mostly backed this big spending by buying company bonds, but interest is cooling.
Amazon's recent $25 billion bond sale didn't attract much buzz.
While Alphabet is still comfortably profitable (with $64 billion in free cash flow in the March quarter), others like Amazon are feeling the squeeze with negative cash flow.
Oracle faces extra pressure after its debt stood at about 2.5 times its sales and its credit rating got knocked down, a sign that even tech titans aren't immune to the risks of going all-in on AI.