Moody’s flags $662 billion risk at the heart of the data center build-out by just 5 companies
Fortune • • business
Key Points:
- A Moody’s report reveals that Amazon, Meta, Alphabet, Microsoft, and Oracle have $969 billion in total future lease commitments for AI data centers, with $662 billion not yet recognized on their balance sheets under GAAP because the leases have not commenced.
- The unrecorded $662 billion in future lease obligations is equivalent to 113% of these companies’ most recent adjusted debt, highlighting significant off-balance-sheet risks related to their AI infrastructure investments.
- These tech giants use shorter initial lease terms with renewal options and off-balance-sheet residual value guarantees (RVGs) to secure landlord financing while deferring lease liabilities, exploiting GAAP rules that require high certainty before recognizing renewal obligations.
- Meta, for example, has committed to $
