Moody's Warns Unprecedented $1 Trillion AI Spending Threatens Credit Quality of Microsoft, Alphabet, Amazon, Meta

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According to Moody's Ratings research released this week, unprecedented spending on AI infrastructure is eroding free cash flow and heightening balance-sheet risk at major hyperscalers including Microsoft, Alphabet, Amazon and Meta. The ratings firm projects capital expenditures will reach $785 billion in 2026 before hitting approximately $1 trillion in 2027. Direct debt across the six tracked hyperscalers has reached $460 billion, while lease commitments for data centers have ballooned to $1.2 trillion, with over $820 billion from leases not yet initiated. Despite these pressures, Moody's noted that the four largest companies retain investment-grade ratings unlikely to face imminent downgrades.
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