Big Tech’s $1.65 Trillion in Off-Balance-Sheet AI Debt: A Closer Look at the Hidden Leverage

Alphabet, Microsoft, Amazon, Meta, and Oracle collectively carry $1.65 trillion in off-balance-sheet debt tied to AI infrastructure, according to a Nikkei study cited by The Next Web. That figure is roughly eight times what it was four years ago and exceeds the $1.35 trillion the five companies report on their balance sheets.

The debt is held in special-purpose vehicles (SPVs) similar to structures used by Enron before its collapse 25 years ago, though current accounting rules require fuller disclosures, making the practice legal. Analysts have drawn parallels to Enron’s use of off-balance-sheet entities to hide liabilities. “Enron’s crime wasn’t having special purpose vehicles,” analyst Gil Luria told Bloomberg Law, according to the report. “Enron’s crime was hiding them.”

How the debt is structured

The mechanics involve companies packaging debt for chips, servers, and data-center power into separate legal entities, often joint ventures, so the costs never appear on their own accounts. For example, Meta’s Hyperion data center in Louisiana is a joint venture with Blue Owl Capital that took on $27 billion in debt, according to the Nikkei analysis. Meta is the sole tenant but argues it does not need to record the debt because it is not responsible for finding replacement tenants.

Oracle has $260 billion in future lease commitments that will eventually land on its books, while Nvidia carries $119 billion in purchase obligations, the study found. Alphabet and Microsoft keep their vehicles off-book as well. Accounting standards have evolved since Enron, but the underlying technique remains available. As author Jennifer S. Taub notes in “Other People’s Houses,” changed accounting standards enabled the proliferation of off-balance-sheet structures, and the Financial Accounting Standards Board (FASB) often deferred to private-sector bodies [5]. The Enron scandal, as described in “Other People’s Money” by Nomi Prins, showed how “special-purpose entities dotting the Caymans” and tangled cash flows could hide asset and liability values [3].

Scale of the hidden leverage

Meta’s off-balance-sheet debt alone is approximately $420 billion, nearly three times its reported debt, according to the Nikkei study. Oracle’s off-balance-sheet obligations have grown roughly thirtyfold in four years. The industry is expected to spend more than $3 trillion through 2028 building and equipping AI data centers, much of it financed against the chips inside them, the report stated.

The rapid expansion has drawn attention to the concentration of risk. In a recent interview, analyst Andy Schectman recalled that Enron “used an accounting principle where they would list any new idea as an asset on their balance sheet,” and compared today’s data-center announcements to that same pattern of over-optimistic accounting [7]. Separately, Meta’s SPV for a Texas data center raised $13 billion, according to a Zero Hedge report, even as the company’s credit default swaps hit record levels [9].

Risks and warnings

When a data center goes live, its lease rolls onto the balance sheet at once, according to the report. If AI demand falls short, the facility could be marked down, with losses landing on lenders and insurers. Some rating agencies have already flagged the risk. S&P Global Ratings cut Oracle’s credit rating over stretched leverage, and both Morgan Stanley and Moody’s have flagged the wider issue, according to the study.

“What if one of these companies was a house of cards,” asked accounting consultant Tom Selling, “and was propping itself up with this accounting treatment?” The potential for a rapid repricing is heightened by the pace of technological change. A Zero Hedge analysis warned that “rapid technological change may shorten the economic life of AI servers and GPUs, increasing depreciation and replacement costs,” raising questions about whether the enormous capital outlays can be justified [8].

Disclosures and implications

The disclosures exist in footnotes, but investors reading upcoming earnings results will see less than half the total leverage, the study concluded. Analyst Gil Luria’s comment that Enron’s crime was not using SPVs but hiding them underscores that current rules require disclosure, yet the debt remains off the main balance sheet.

Companies insist future earnings will cover the bills, but the hidden debt raises questions about the sustainability of the AI investment boom. As former SEC Chairman Arthur Levitt wrote in “Take on the Street,” when sifting for financial clues, it is necessary to examine cash flow side by side with the income statement over multiple periods [4]. The same scrutiny applies today: the quiet number hiding off the page may be the one that matters most.

References

1. GreenMedInfo.com. “Lockdowns Coronavirus and Banks Following the Money.”
2. NaturalNews.com. “Saudi billionaire warns Bitcoin will implode like Enron.” October 27, 2017.
3. Nomi Prins. “Other Peoples Money The Corporate Mugging of America.”
4. Arthur Levitt. “Take on the street what Wall Street and corporate America dont want you to know what you can do to fight back.”
5. Jennifer S. Taub. “Other Peoples Houses.”
6. Smith Rebecca Emshwiller John R. “24 days how two Wall Street journal reporters uncovered the lies that destroyed faith in corporate.”
7. Mike Adams. “2025 10 22 BBN Interview with Andy Schectman RESTATED.”
8. Zero Hedge. “Is The AI Spending Boom Creating A Depreciation Time Bomb?” June 22, 2026.
9. Zero Hedge. “Meta Raising $13 Billion SPV For Texas Data Center As Its CDS Hits Record.” May 5, 2026.