Moody's Warning: AI Race Poses Major Financial Risks, $662 Billion Not Yet Included in Tech Giants' Balance Sheets

BlockBeats News, February 25 — Moody’s, a well-known rating agency, released an in-depth industry report stating that the fierce competition in the tech industry to build artificial intelligence infrastructure has created a significant financial risk. The five major cloud service providers in the United States have committed a total of $662 billion in future data center leases. These leases have not yet begun and are therefore not currently recorded as liabilities on their balance sheets. However, as these leases are gradually activated over the next few years, more than $500 billion worth of data center activities will be officially reflected on their balance sheets.

Moody’s analyzed the financial disclosures of Amazon, Meta, Alphabet (Google’s parent company), Microsoft, and Oracle in the report. It noted that the unprecedented scale of AI data center construction is putting enormous pressure on traditional accounting metrics. By the end of 2025, the five tech giants’ total undiscounted future lease commitments will reach $969 billion, with over two-thirds, or $662 billion, relating to leases that have not yet started. Under US Generally Accepted Accounting Principles (GAAP), these companies are not required to record these substantial obligations on their current balance sheets. These “off-balance-sheet” commitments are equivalent to implicit debt. Once gradually recognized as liabilities on the balance sheet, they will significantly increase the adjusted debt level and potentially impact financial flexibility and credit ratings.