$1.65 trillion in "shadow" debt: how big tech hides colossal AI liabilities
Silicon Valley giants — Alphabet, Microsoft, Amazon, Meta, and Oracle — have accumulated a colossal $1.65 trillion in hidden debts that are not reflected on their official balance sheets. This figure significantly exceeds their stated liabilities of $1.35 trillion. The paradox is that all this is happening against the backdrop of a rapidly melting free cash flow in the sector.
Hidden Liabilities: What Exactly Are They Hiding?
This is not about traditional loans, but about contracts for leasing GPUs, data centers, and participation in joint ventures. Current accounting rules allow these liabilities not to be classified as debt until the facilities are put into operation. This creates a distorted picture for investors.
The most striking example is Meta, whose hidden liabilities have reached $420 billion, three times its official debt. Oracle's situation is even more dramatic: its "shadow" liabilities have grown 30-fold over the past four years. The Bank for International Settlements (BIS) has already called this practice "shadow borrowing."
Cash Flow Under Pressure
Bank of America warns of an impending liquidity crisis. Forecasts show that the free cash flow of the largest data center operators will collapse from $191 billion in 2025 to $19 billion in 2026, and will turn negative by approximately $26 billion in 2027. The reason is record capital expenditures on AI infrastructure, which will already exceed $725 billion by 2026. The sector's debt issuance will reach $175 billion — six times the average over the past five years.
Betting on a Monopoly
The companies' strategy is not just to recoup the infrastructure, but to take a dominant position in the AI value chain. They are betting that every AI query will pass through their servers. Alphabet looks like the favorite here: Google Cloud revenue grew by 63% year-over-year, the order backlog nearly doubled to $462 billion, and the company began selling its own TPU chips to external clients.
Expert opinion: This game is a classic example of "all or nothing." If AI demand lives up to expectations, the winner will be the one who owns their own infrastructure. But if the market cools down, the "hidden" trillions in debt will come crashing down on investors and insurers who were not even aware of the full scale of the risks. The cryptocurrency market, sensitive to macroeconomic shocks, should closely monitor this scenario.