"AI companies are looking to spend trillions of dollars on data centers to power their increasingly resource-intensive AI models - an astronomical amount of money that could threaten the entire economy if the bet doesn't pay off. As the race to spend as much money as possible on AI infrastructure rages on, companies have become increasingly desperate to keep the cash flowing."
"AI companies have accrued at least $200 billion in debt, per the publication. A more realistic figure is likely considerably higher, as that estimate doesn't count undisclosed private deals. Oracle announced over the weekend that it's raising a staggering $45 billion to $50 billion in debt and equity sales to build additional cloud infrastructure capacity, plans that once again highlighted persistent concerns over a growing AI bubble."
AI companies are planning to spend trillions of dollars on data centers to support increasingly resource-intensive models, creating massive capital expenditure requirements. Companies including OpenAI, Anthropic, and Oracle are tapping junk debt, private credit, and asset-backed loans, exhausting existing debt markets. Reported debt totals reach at least $200 billion, likely higher after undisclosed deals. Oracle is raising $45–50 billion in debt and equity to expand cloud infrastructure, pushing it into negative cash flow. Elon Musk's SpaceX-xAI plans and rumored IPO signal ambitions to secure further funding, including proposals to place data centers in space. Many firms deprioritize near-term profitability amid heavy borrowing.
Read at Futurism
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