Companies providing data centers, chips, and “compute” processing power to OpenAI have accrued approximately $96 billion in debt to finance their operations, according to an analysis by the Financial Times. This substantial debt burden underscores the AI sector’s rising reliance on borrowed capital, particularly its dependence on the loss-making AI startup, OpenAI.
Currently, the revenues generated by AI companies and many of the data center operators expanding rapidly to support them are insufficient to cover their extensive build-out costs. OpenAI has made commitments totaling $1.4 trillion to secure the energy and computing resources necessary for future operations, yet it projects only $20 billion in revenues for the current year. A recent analysis by HSBC indicated that even if OpenAI surpasses $200 billion in revenue by 2030, it will still require an additional $207 billion in funding to remain operational.
The Financial Times detailed the debt acquired by OpenAI’s partners as follows: $30 billion borrowed by SoftBank, Oracle, and CoreWeave; $28 billion in loans from Blue Owl Capital and Crusoe; and $38 billion in ongoing negotiations with Oracle, Vantage, and their financial institutions. This totals $96 billion in debt.
The reliance on debt for AI infrastructure is a recent phenomenon; prior to this year, most investment in AI expansion was financed through cash reserves of major tech firms like Microsoft, Alphabet, Amazon, and Meta. Investors will closely monitor how CoreWeave manages its debt, as the company reported $3.7 billion in current debt, $10.3 billion in non-current debt, and $39.1 billion in future lease obligations for data centers in its Q3 earnings report. Despite projecting only $5 billion in revenue this year, CoreWeave cites a $56 billion “revenue backlog.”
All mentioned companies were contacted for comments, but CoreWeave declined to respond when reached by Fortune.
Separately, the five major hyperscalers—Amazon, Google, Meta, Microsoft, and Oracle—have collectively taken on $121 billion in new debt this year to fund their AI operations, according to Bank of America. This figure exceeds four times the average debt of $28 billion these companies issued annually over the past five years.
This surge in investment-grade corporate debt is significantly impacting credit markets, as noted by analysts at Bank of America. They highlighted that the weeks leading up to Thanksgiving typically represent a peak period for investment-grade supply, with around $50 billion tracked for the current week and approximately $220 billion over the past four weeks—about 70% higher than the usual volume for this time of year.
Furthermore, the increase in supply from tech firms correlates with a substantial rise in spreads—the additional interest yield demanded by debt buyers over the risk-free rate—in the credit default swap (CDS) market. According to Deutsche Bank, CDS serve as an insurance mechanism on corporate debt, compensating holders in the event of a default. A rise in CDS yields suggests an elevated perception of default risk. Notably, Oracle’s five-year CDS has widened by approximately 60 basis points to 104 bps since late September, while CoreWeave’s has surged by around 280 bps to about 640 bps during the same period.
While the long-term implications of this shift remain unclear, analysts suggest that these recent trends mark a new phase in the AI boom—one in which investors are increasingly inclined to hedge their risks and where public credit markets are increasingly called upon to finance growing capital expenditure needs. The reliance on free cash flow from hyperscalers may no longer be sufficient to sustain this rapidly evolving sector.
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