The AI boom is accumulating a $2.13 trillion hidden debt pile among tech giants

An investigation, based on a Nikkei Asia report from July 22 and subsequent SEC filings, shows that Microsoft, Google, Amazon, Meta, and Oracle have accumulated a total of approximately $2.13 trillion in off-balance-sheet debt related to the construction of artificial intelligence data centers. This is significantly more than their reported total liabilities of $1.35 trillion.

The companies have used at least five different financial instruments - special purpose vehicles (SPVs), credit enhancement derivatives, finance leases, residual value guarantees, and unfunded lease agreements - that allow liabilities to be moved off public balance sheets. The Bank for International Settlements drew attention to such practices in its March 2026 quarterly report, introducing the term "tension loans" for liabilities that are "analogous to debt in their economic nature, but remain largely off corporate balance sheets".

The "Beignet" Structure

Meta's approach proves to be the most complex. For the construction of Hyperion - a data center in Louisiana, the area of which is four times larger than Central Park - the company has channeled $27.3 billion in debt financing through a network of seven shell companies in Delaware, registered under the code name "Beignet". Its net lease REIT and co-investors hold 80% of the joint venture through these structures, while Meta retains 20%. This allows it to claim that it is not the "primary beneficiary" and, therefore, is not required to consolidate the debt into its financial statements.

Meta's balance sheet records only $2.37 billion of the project's value. The bonds, issued under Rule 144A as a private placement with a coupon of 6.581% and maturity in 2049, are backed by the creditworthiness of Meta itself through a residual value guarantee with a limit of approximately $28 billion.

Different paths, one goal

Each of the companies has chosen a different model, but the result is similar. Microsoft's finance lease liabilities have surged over the past two years - from $27.1 billion to $62.9 billion - and now exceed its reported total debt, but they appear in the financial reports under the "other liabilities" line rather than as debt. Google provides credit guarantees, the nominal value of which jumped from $16.9 billion to $43.8 billion in six months, while only $815 million is reported on the balance sheet at fair value.

Amazon and Oracle rely on lease obligations that will only come into effect in a few years, allowing them to keep $106.3 billion and $260 billion, respectively, entirely off their balance sheets. On July 9, S&P Global Ratings downgraded Oracle's credit rating from BBB to BBB− - just one notch above "junk" status - due to risks associated with the sharp increase in artificial intelligence infrastructure spending.

Systemic risk

In its annual report for June 2026, the BIS took the unprecedented step of identifying, alongside sovereign debt, the primary threats to the global financial system as active bubbles fueled by AI euphoria and circular financing schemes. The parallel to the 2008 crisis is becoming increasingly evident: 60% of the planned data centers have not yet begun construction, but the debt instruments linked to them have already been sold. GPU equipment depreciates over five to six years, while bond repayment periods stretch up to 24 years.

In March 2026, the spread on Oracle's credit default swaps exceeded the peak levels of the 2008 crisis, and four months later, a new record was set. This shows that markets are already facing serious difficulties in assessing the uncertainty embedded in such structures.