Big Tech hides $1.65 trillion in AI debt off its balance sheets - more than its total reported debt - using legal structures regulators still allow.
  • someguy3@lemmy.worldEnglish
    24·
    1 month ago

    A Nikkei analysis of financial footnotes at Alphabet, Microsoft, Amazon, Meta, and Oracle found $1.65 trillion in off-balance-sheet obligations tied to AI infrastructure — binding, must-pay commitments parked in the fine print.

    …a company creates or partners with a separate legal entity — a special-purpose vehicle (SPV) — that borrows the money and owns the assets. The tech company signs long-term leases or capacity contracts but doesn’t record the SPV’s debt on its own books.

    • ptu@sopuli.xyzEnglish
      1·
      1 month ago

      That is one way of saying upcoming lease contracts and purchase commitments reported according to IFRS and IAS and disclosed on financial statements.

    • Nighed@feddit.ukEnglish
      1·
      1 month ago

      What stops them letting the investment vehicle crash and burn though? It’s a lender problem more than one for the tech companies?