Moody's says 'unprecedented' AI spending threatens credit quality of Amazon, Meta, Alphabet and others
📰 source: cnbc_usnews · 💼 business
moody's warned that the ai spending race is eroding free cash flow and increasing balance-sheet risk at six hyperscalers: microsoft, amazon, alphabet, meta, oracle and coreweave. the ratings firm called the shift from asset-light to asset-heavy 'unprecedented.'
capex is projected to hit $785 billion in 2026 and $1 trillion the following year. direct debt across the group has reached $460 billion, with alphabet announcing an $85 billion equity sale. lease commitments have ballooned to $1.2 trillion, most on data centers still being built. moody's treats these as debt-equivalent liabilities.
despite this, moody's said microsoft, alphabet, amazon and meta still have strong balance sheets and investment-grade ratings aren't under imminent threat. the pressure is concentrated on lower-rated oracle and coreweave. moody's also noted a circular ecosystem where tech giants invest in ai labs that then spend on cloud services from them.
why it matters: ratings agency warns that massive ai spending is shifting tech giants from asset-light to asset-heavy, threatening credit profiles and investor returns.
source: cnbc_usnews
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