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Five US tech giants' hidden debts soar to $1.65T on opaque AI funding
2 months ago
- Hidden debt at five US tech giants has soared to $1.65 trillion, roughly eight times higher than four years ago, driven by opaque AI funding.
- Data center leases and GPU supply contracts are primary sources of off-balance-sheet liabilities, as shown in a Nikkei study.
- Meta's off-balance-sheet debt is about $420 billion, nearly triple its transparent debt, highlighting the scale of hidden obligations.
- The growing hidden debt exceeds actual debt, making it more difficult for investors to assess financial risk.
Follow the money, especially in open source
2 months ago
- The Linux Foundation, a non-profit organization promoting Linux, employs Linus Torvalds and is funded largely by corporate donations.
- Many platinum donors are AI-focused companies (e.g., Google, Microsoft, Facebook) that are struggling financially due to heavy AI investments.
- There is criticism that the Linux Foundation is overfunded, similar to Mozilla or Wikimedia, and does not sufficiently support grassroots open-source projects.
- Linus Torvalds is viewed as pragmatic about AI, considering it a useful tool despite earlier skepticism about hype, with his stance evolving over time.
- The debate includes concerns about AI's role in coding, such as bug detection versus slopcoding, and the need for human oversight in its use.
AI boom built on debt, investor demand plunging, hyperscalers ramp up bond blitz
2 months ago
- Hyperscalers like Alphabet, Meta, Amazon, and Oracle have issued over $300 billion in bonds since 2025 to fund AI infrastructure.
- Nvidia and SpaceX also entered bond markets recently, with SpaceX's debt trading at junk bond levels post-IPO.
- Investor appetite for AI debt is waning, with lower demand forcing higher yields and wider spreads.
- The saturation in the dollar bond market is pushing tech giants to issue debt in other currencies, increasing borrowing costs.
- AI debt faces competition from rising U.S. Treasury debt as the federal deficit deepens.
- Stock market selloffs have hit chip stocks hard, with Nvidia losing its top market cap spot to Apple.
- The release of China's Moonshot Kimi K3 AI model raised concerns about cost competitiveness and sustainability of U.S. AI spending.
- A shift to cheaper Chinese AI models could reduce revenue for U.S. firms, potentially cutting capital expenditures and triggering a mild recession.
- Consumer spending, supported by equity gains, is at risk if stock prices decline, exacerbating economic slowdown.

ai funding

Five US tech giants' hidden debts soar to $1.65T on opaque AI funding

Follow the money, especially in open source

AI boom built on debt, investor demand plunging, hyperscalers ramp up bond blitz