Moody’s flags $662 billion risk at the heart of the data-center buildout by just 5 companies

Fortune

by Nick Lichtenberg

February 25, 2026

AI-Generated Deep Dive Summary

The technology sector's rapid expansion into AI infrastructure has created a significant financial risk, as highlighted by Moody’s. The top five U.S. hyperscalers—Meta, Amazon, Alphabet, Microsoft, and Oracle—have accumulated $662 billion in future data center lease commitments that are currently not recorded on their balance sheets due to GAAP accounting rules. These leases, which will begin over the next several years, represent a massive obligation that could strain these companies' financial health as they become payable. The report reveals that by the end of 2025, these five tech giants had amassed $969 billion in total undiscounted future lease commitments for data centers that have yet to be built. Of this amount, $662 billion represents leases that have not yet commenced, meaning these companies are not required under GAAP to recognize them as current liabilities. This figure is equivalent to 113% of their combined adjusted debt, raising concerns about their ability to manage such a large off-balance-sheet liability. The root cause of this issue lies in the unique nature of AI hardware and the rules governing corporate leases. Hyperscalers are demanding shorter initial lease terms with renewal options, often backed by significant guarantees from lessees. GAAP requires that only "reasonably certain" renewals be included in lease liabilities, creating a gap between companies' obligations and their financial statements. For example, Alphabet disclosed $42.6 billion in unrecorded future lease payments for data centers in the third quarter of 2025, up from $23.9 billion just three months earlier. This hidden obligation poses significant risks to these tech giants. As leases begin and obligations are fulfilled, these companies will be forced to recognize large liabilities on their balance sheets, potentially impacting their debt metrics and investor perceptions. The rapid growth of AI infrastructure and the aggressive pace of data center construction create financial uncertainty that could strain traditional accounting frameworks and raise questions about the sustainability of this build-out. Ultimately, while these companies

Verticals

businessfinance

Originally published on Fortune on 2/25/2026