Moody’s Raises Concern: $785B AI Investment by Big Tech Could Impact Credit Ratings
Credit ratings agency Moody’s Ratings has issued a stark warning. The unprecedented scale of artificial intelligence (AI) infrastructure spending by the world’s largest tech companies is eroding their financial stability and threatening their credit quality. The report, released this week, targets six hyperscalers: Microsoft, Amazon, Alphabet, Meta, Oracle, and CoreWeave.
Moody’s projections suggest that the combined capital expenditures of these six firms are expected to reach $785 billion in 2026. This figure is predicted to climb further to approximately $1 trillion in 2027 — a figure that would have been unimaginable just a few years ago. The agency found that direct debt across the group has already reached $460 billion. Meanwhile, off-balance-sheet data center lease commitments have ballooned to $1.2 trillion. More than $820 billion of this comes from leases on facilities still under construction.
This shift is described by Moody’s as a fundamental break from Silicon Valley’s traditional asset-light business model. Previously, software-driven margins generated vast free cash flow. However, generative AI demands enormous physical infrastructure packed with expensive, energy-hungry chips. The agency noted that Amazon recently disclosed capital expenditure plans exceeding $150 billion through 2027. At the same time, Meta has committed to over $40 billion annually on AI. Despite the warnings, Moody’s acknowledged that Microsoft, Alphabet, Amazon, and Meta still retain some of the strongest corporate balance sheets in the world. The sharpest pressure falls on lower-rated companies like Oracle (rated Baa2, negative outlook) and specialized AI cloud provider CoreWeave.