S&P Global flags possible hidden AI debt at big tech
S&P Global is sounding the alarm about possible hidden AI-related debt at big tech companies like Amazon, Microsoft, and Alphabet.
It is worried that complicated deals with smaller AI firms could be hiding extra borrowing behind the scenes, even though current credit ratings haven't changed.
As S&P's Global Head for Digital Infrastructure Mark Habib puts it, "If it's not reported, then it's not part of the disclosure by the hyperscalers... [and] we might not have the visibility," and the lack of transparency means investors may not know how much these companies are really on the hook for.
Top tech firms to spend $7T+
Between 2025 and 2030, top tech firms are set to spend over $7 trillion on data centers and AI projects, meaning negative cash flow until at least next year.
Back in July, Oracle's rating took a hit because of concerns about heavy AI investment and unclear profits.
For now, S&P says no immediate rating changes are needed, but if spending or competition ramps up even more, it might have to rethink things.