More than two months ago, long before most Wall Street analysts had any clue that the bulk of the AI buildout commitments were diligently hidden in various off-balance sheet SPVs and other (perfectly legal) accounting gimmicks, we wrote a lengthy article detailing just that, and explaining why far beyond the $1 trillion (and rapidly rising) in annual plain vanilla capex -- all of which now has to be funded through debt issuance since free cash flow across the hyperscaler universe is negative for the foreseeable future (if not forever) -- which most pundits obsess over daily...
... the real risk was in the "The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle."
The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle https://t.co/2IAxYrTXjL
— zerohedge (@zerohedge) June 12, 2026
We followed up on this critical topic after the latest batch of hyperscaler earnings in late July, which revealed that the nearly $2 trillion in spending commitments had exploded in the second quarter, with just GOOGL and META north of $1.5 trillion, which prompted us to conclude that "across all hypers, off BS commitments are now $3+ trillion, double in one quarter."
*MICROSOFT: LEAS
