Top hyperscalers likely to have more AI-linked debt than now known, S&P Global warns
ORCL•S&P Global estimates the biggest technology firms likely have more AI-linked liabilities than currently known, but says no ratings changes are needed now. The six largest US hyperscalers are expected to spend more than $7 trillion on data centers and other AI-related capital expenditures from 2025 through 2030.
1. Debt visibility concerns
S&P Global estimates the world's biggest technology firms are likely to have more AI-linked liabilities than currently known, though it sees no need to change any ratings at present. Mark Habib, S&P's global head for digital infrastructure, said the biggest rating risk remains whether expected profits fail to materialize, and pointed to financing structures in which hyperscalers effectively guarantee data center projects or smaller AI companies.
2. Spending and ratings
S&P expects Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX to spend more than $7 trillion on data centers and other AI-related capital expenditures between 2025 and 2030, and to have negative free cash flow until at least next year. Habib said S&P has no estimate for how much additional debt these financing structures could add to balance sheets. S&P downgraded Oracle to BBB- in July over concerns about its AI spending and an uncertain path to profitability.
3. No current rating disconnect
Habib said S&P does not currently see a major disconnect between its ratings and the market's assessment of AI-linked bonds that would force rating changes. He said the view could change if spending becomes unsustainable, including through further investment increases or increasingly intense competition for revenue.
