S&P Global flags hidden AI debt risks

S&P Global warned the world's biggest technology companies could be carrying more AI linked liabilities than visible as AI infrastructure spending grows.

“it is safe to assume that there is more (debt) out there that we are not seeing”

Mark Habib explains debt visibility

S&P Global's Head for Digital Infrastructure said liabilities might not appear on balance sheets due to complex financing arrangements.

“if it's not reported then it's not part of the disclosure by the hyperscalers”

AI buildout creates financing stress

Nvidia-backed CoreWeave faces debt pressure as investors assess if ai buildout returns justify aggressive borrowing.

Hyperscalers to spend $7 trillion on ai

S&P expects the six biggest us hyperscalers to spend over $7 trillion on data centers and ai capital expenditure between 2025 and 2030.

Free cash flow remains negative

Hyperscalers' free cash flow will stay negative until at least next year as ai investments convert slowly to revenue.

S&P downgraded Oracle to BBB

S&P downgraded oracle to the lowest rung of investment grade in july citing ai spending and uncertain profitability.

S&P says ratings won't change soon

S&P says current ai debt risks don't warrant rating changes but could shift if spending becomes unsustainable.

“for now we don't have the view that there is a major disconnect that needs to force our ratings to change at this point”