Big Tech AI data center debt surge

The largest builders of AI data centers—Alphabet, Amazon, Meta, Microsoft, and Oracle—have collectively added about $350 billion to their debt over the past five years to finance an unprecedented AI infrastructure spending spree. Their combined capital expenditure is projected to reach around $725 billion in 2026, nearly double mid-2025 levels. This spending has strained free cash flows, with Amazon and Oracle reporting negative free cash flow, and Oracle's leverage rising to about 4.4 times EBITDA. Fitch Ratings warned that an AI market correction is a major global credit risk, noting that U.S. corporate bond issuance surged 26% in the first half of 2026, driven largely by AI-related fundraising. S&P Global Ratings downgraded Oracle to the lowest investment-grade rating. Additionally, the five companies have committed about $1.09 trillion in future payments under uncommenced leases, mostly for data centers, which could become a burden if AI demand falters. Hyperscalers have increasingly issued bonds in multiple currencies to tap global investors, with Amazon and Alphabet raising $60 billion in multi-currency bonds over the past year. Investors are growing cautious about the returns on massive AI spending, as only Alphabet's stock has outperformed the S&P 500 this year, while Microsoft and Oracle shares have dropped more than 20%.