- Big Tech companies are using off-balance-sheet financing vehicles similar to those that enabled Enron's collapse to fund massive AI infrastructure spending, potentially hiding debt and risks from investors.
- These arrangements package debt tied to assets like chips, servers, and energy equipment, keeping substantial costs off parent companies' balance sheets and presenting a healthier financial picture.
- Examples include Meta's $46 billion Louisiana data center VIE, Alphabet's off-balance-sheet leases, Oracle's $3.3 billion backstop, and Nvidia's $119 billion purchase obligations.
- The accounting treatment is controversial, with critics warning of a 'house of cards' risk and auditors highlighting significant judgment in consolidation decisions.
- Investors must dig through footnotes to uncover these structures, as the information is available but not immediately obvious, echoing Enron's crime of hiding special purpose vehicles.