Big Tech Is Borrowing Billions to Build AI — and the Risk Is Growing

The AI infrastructure boom is running on debt. As companies race to build data centers, some of the biggest names in tech are turning to the bond market to fund their spending — and not all of them are on equally solid financial footing.

Oracle has been one of the most aggressive issuers, selling bonds at a pace that has rattled markets. The company's AI data center ambitions are staggering in scale, but its underlying finances are weaker than peers like Microsoft, which holds a Triple-A credit rating — better than the U.S. government's. Alphabet, Amazon, and Meta are also spending heavily, but their stronger balance sheets have kept them out of similar market scrutiny.

The broader AI spending wave has clear economic benefits: JPMorgan Asset Management estimates it has contributed roughly 1.1% to U.S. economic growth, boosting sectors from semiconductors to utilities to energy. But that growth is increasingly debt-funded, and the concentration of risk in companies like Oracle raises questions that investors are only beginning to price in.

Key Takeaways:

• Oracle is selling bonds at scale to finance AI data centers, with financial risk higher than its hyperscaler peers
• Microsoft, Alphabet, Amazon, and Meta are also massive data center investors but with stronger credit positions
• AI infrastructure spending has contributed ~1.1% to U.S. GDP (JPMorgan estimate), but financial risk is rising

Read the full article on The New York Times