Cross-border informationViewpoint News: On July 21, it was reported that five U.S. tech giants have seen their hidden debt surge to $1.65 trillion due to opaque AI-related financing activities.
Nikkei Asia found, after reviewing financial reports and other documents of Google’s parent company Alphabet,
These companies are rapidly expanding data centers to drive artificial intelligence development, and building data centers typically requires investments in the tens of billions or even hundreds of billions of dollars. To cut costs, tech firms often sign lease agreements with data center operators and enter long-term procurement contracts for GPUs and servers. Under U.S. accounting standards, undelivered hardware and data center leases that are not yet operational are considered off-balance-sheet items and do not need to be recorded on the balance sheet, only disclosed in the notes to financial statements. This treatment often makes it difficult for retail investors to detect potential risks.
Oracle is advancing the Stargate data center project in cooperation with OpenAI, using a model of long-term lease agreements with operators. As of the end of May this year, Oracle's hidden debt had reached $273.3 billion, a more than 30-fold increase in four years.
Meta, through a joint venture with a U.S. investment firm, is building a large data center in Louisiana at a cost of $27 billion. Meta holds a 20% stake in the project and obtains computing resources through long-term lease agreements, which correspondingly adds to its hidden debt.
Rating agency Moody's warned about the massive hidden liabilities of U.S. tech giants as early as February. According to the Financial Times, Moody’s said in a report at the time that current U.S. accounting standards have “limitations.”
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