Key Takeaways
- Hidden liabilities: Off-balance sheet obligations at Alphabet, Microsoft, Amazon, Meta and Oracle have climbed nearly eightfold in four years, reaching $1.65 trillion.
- Cash-capex mismatch: Between 2025 and 2027, capex at the five hyperscalers will grow by $534 billion, against just $340 billion in additional operating cash flow.
- Market reaction: Oracle has lost 36% of its stock value year-to-date, while credit default swap spreads on Oracle and Nvidia widen.
Hidden liabilities outpace reported debt
An analysis by Nikkei published in July 2026 documents how off-balance sheet debt at the five largest U.S. tech groups has reached $1.65 trillion, surpassing the debt these same companies carry on their books. The nearly eightfold increase over four years stems from multi-year contracts for data centers, GPUs and servers that accounting rules keep off the books until the infrastructure becomes operational.
Meta tops the list with roughly $420 billion in off-balance sheet liabilities. Oracle has seen these commitments grow more than thirtyfold, driven by the Stargate project developed with OpenAI. The figures, while formally disclosed, remain buried in the footnotes of filings submitted to the SEC—sections most investors never read.
Cash flow can't keep pace with capex
A Reuters analysis quantifies the imbalance: between 2025 and 2027, capital expenditure at the five hyperscalers is expected to rise by roughly $534 billion, against an increase of just $340 billion in operating cash flow. For every additional dollar generated, these companies are investing $1.57.
Amazon has already posted the sharpest decline: free cash flow dropped to $1.2 billion in the first quarter of 2026, down from roughly $26 billion in the same period a year earlier. Oracle stands out as the most exposed: capex reached 174% of operating cash flow in fiscal 2026, up from 47% four years ago, pushing free cash flow into negative territory. Microsoft, in its second fiscal quarter, posted capex of $37.5 billion against $35.8 billion in operating cash flow.
How analysts read the numbers
Barry Glavin, Chief Investment Officer at Amundi, compares the dynamic to the nineteenth-century gold rush: infrastructure suppliers accumulate value while those financing the race expose their balance sheets to mounting risk. Morgan Stanley forecasts investment of $821 billion in 2026 and $1.267 trillion in 2027, figures fueling the debate over the model's sustainability.
Markets split between stock optimism and bond caution
Wall Street largely maintains buy positions on hyperscaler stocks, betting on the future monetization of AI. On the credit side, signals diverge: credit default swap spreads on Oracle and Nvidia have widened, and Alphabet's century bond has fallen roughly 7% from its issue price. JPMorgan estimates the sector's financing needs at around $1.4 trillion over the coming years, while the Bank for International Settlements warns of bubble risks comparable to the dot-com era.
The next 18 to 36 months will be decisive
The traditionally "asset-light" business model of tech giants is shifting toward an "asset-heavy" structure, with capital locked into physical infrastructure at an unprecedented scale. The real test will come once gigawatt-scale data centers go live: only then will it become clear whether actual AI demand justifies the volume of debt—disclosed and hidden—that these five groups have accumulated.
