Big Tech built its reputation on mountains of cash. It is building its AI empire on debt, and the bill is starting to land in Europe.
The five biggest builders of AI data centres in the US have doubled their debt over five years. Together, Alphabet, Amazon, Meta, Microsoft and Oracle have piled on about $350bn, according to data compiled by Bloomberg. They are betting that cutting-edge AI will one day pay it all back.
For now, the interest is almost a rounding error. The five paid a combined $10bn on their debt last year. That is more than double 2019, but tiny beside Google’s cash flow of roughly $64bn last quarter. These are still some of the most profitable firms on Earth.
The strain shows at the edges. Amazon’s free cash flow turned negative in the March quarter. Oracle’s debt reached about 2.5 times its sales, and S&P cut its rating on Thursday to one notch above junk, blaming AI spending.
The market is starting to flinch
