Moody's warns: AI race poses major financial risks, $662 billions not yet reflected on tech giants' balance sheets

BlockBeats News, February 25, renowned rating agency Moody's released an in-depth industry report pointing out that the technology industry's frenzied race to build artificial intelligence infrastructure has created a huge financial risk. The five major U.S. hyperscale cloud service providers have cumulatively committed to future data center leases totaling 662 billion dollars. These leases have not yet commenced, so they are not currently considered liabilities and are not reflected on their balance sheets. However, as these leases gradually begin in the coming years, more than 500 billion dollars in data center activities will be officially recorded on the balance sheets.

Moody's analyzed the financial disclosures of Amazon, Meta, Alphabet (Google's parent company), Microsoft, and Oracle in the report, stating that the unprecedented scale of AI data center construction is putting enormous pressure on traditional accounting metrics. By the end of 2025, the five tech giants' total undiscounted future lease commitments will reach 969 billion dollars, of which more than two-thirds—662 billion dollars—are for leases that have not yet started. According to U.S. Generally Accepted Accounting Principles (GAAP), these companies currently do not need to record these massive obligations on their current balance sheets. These "off-balance-sheet" commitments are equivalent to implicit debt, and once gradually converted to on-balance-sheet liabilities, they will significantly increase adjusted debt levels and potentially impact financial flexibility and credit ratings.