Big Tech’s Hidden Debt Balloons to $1.65 Trillion as AI Arms Race Heats Up
A Nikkei study reveals that five US tech giants, including Meta and Microsoft, now carry an estimated $1.65 trillion in off-balance-sheet debt from AI infrastructure investments—roughly eight times the level four years ago and exceeding their on-book debt. Meta alone accounts for about…
A Nikkei study finds that five US tech giants—including Meta and Microsoft—now carry roughly $1.65 trillion in off-balance-sheet debt from massive AI infrastructure investments, up about eightfold from four years ago and exceeding their actual on-book debt, raising concerns about investor risk assessment.
- As of the July 21, 2026 close, Meta (META) was at $643.81, down 0.32% from the prior close of $645.85. The stock was not traded on July 22 due to a US holiday.
- The five tech giants (Alphabet, Amazon, Meta, Microsoft, Oracle) have an estimated $1.65 trillion in off-balance-sheet debt, roughly eight times the level four years ago.[Nikkei]
- Meta's off-balance-sheet debt is about $420 billion, nearly three times its on-book debt.[Nikkei]
- These hidden debts stem primarily from long-term AI commitments such as data center leases and GPU supply contracts.[Nikkei]
- Both Morgan Stanley and Moody's have flagged the issue in their reports.[Semafor]
- Meanwhile, tech stocks have rebounded from a recent AI-bubble-fear-induced slump, with chipmakers like Samsung and TSMC posting notable gains.[Semafor]
A Nikkei study published July 21 reveals that as AI investment has exploded, the off-balance-sheet debt of five US tech titans—Alphabet, Amazon (AMZN), Meta (META), Microsoft (MSFT), and Oracle (ORCL)—has surged to roughly $1.65 trillion, about eight times the level four years ago. That sum now exceeds their actual on-book debt, making it harder for investors to gauge risk.[Nikkei]
As of the July 21, 2026 close, Meta (META) was at $643.81, down 0.32% from the prior close of $645.85. The stock was not traded on July 22 due to a US holiday. During the session, Meta opened at $654.18, hit a high of $655.88, and touched a low of $643.2.
Off-Balance-Sheet Debt: The Hidden Tab of the AI Arms Race
Nikkei's study notes that these hidden debts are largely driven by long-term data center leases and GPU supply agreements signed to support AI operations. These massive commitments don't fully appear on traditional balance sheets, creating what the report calls "hidden debt."[Nikkei] Meta's off-balance-sheet debt is particularly striking: an estimated $420 billion, nearly three times its on-book debt.[Nikkei]
While these companies expect future earnings to cover the obligations, the market is starting to show concern. According to Nikkei, the market "has begun to show concern," and both Morgan Stanley and Moody's have highlighted the issue in their reports.[Semafor]
Market Reaction: AI Bubble Fears and a Rebound
Semafor reports that tech stocks have rebounded from a recent slump driven by AI bubble fears. Investors betting on sustained semiconductor demand have pushed chip stocks like Samsung and TSMC sharply higher from relative lows; tech benchmarks in South Korea, Taiwan, and China all rose.[Semafor] The rebound contrasts with the off-balance-sheet debt concerns, reflecting the market's mixed sentiment on AI's long-term prospects.
Other AI Developments: Microsoft and Mistral Strike Multibillion-Dollar Deal
In another major AI move, Reuters reported July 21 that Microsoft has agreed to fund French AI startup Mistral's European expansion in a multibillion-dollar deal.[Reuters] The deal underscores the massive capital outlays big tech is making to secure AI leadership—echoing the off-balance-sheet debt problem Nikkei highlighted.
Tech Giants Keep Expanding: Apple and Amazon's Real Estate Moves
Meanwhile, tech giants continue to expand their physical footprint. According to 9to5Mac, Apple (AAPL) has agreed to lease a 125,800-square-foot office building at 580 North Mary Avenue in Sunnyvale. It's Apple's first major real estate deal disclosed in 2026, following more than $1 billion in spending in 2025 to expand its office and lab space in the South Bay by over 1.5 million square feet.[9to5Mac] The same report notes that Amazon has also agreed to lease 316,600 square feet of office space in Sunnyvale.[9to5Mac] These real estate deals show that despite the financial transparency challenges posed by AI investments, tech giants are still aggressively expanding their physical presence.
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