AI's Hidden Debt Pile Balloons Past $1.6tn Off the Books
Five of the biggest AI spenders - Alphabet, Microsoft, Amazon, Meta and Oracle - are carrying roughly $1.65tn in debt kept off their balance sheets, more than the $1.35tn they disclose. The borrowing is routed through special purpose vehicles that finance data centres, with outside investors like Pimco and Blue Owl holding majority stakes while the hyperscaler remains the sole customer. Meta's off-balance-sheet debt runs about three times its reported figure, and Oracle's has ballooned roughly 30-fold in four years. Much of the funding comes from private credit backed by pension and insurance money, sidestepping ratings agencies entirely.
Tesla Profits Slip 5% as Aging Lineup Cedes EV Ground
Tesla revenue rose 26% year-on-year but profit fell 5% and free cash flow swung to negative $1.1bn, sending shares down more than 3% after hours. Delivery growth of 25% lagged a faster-expanding EV market, and margins continue to erode as the Model 3 and Y platform approaches its tenth year without a successor. The stock, still valued at $1.4tn on roughly 350 times earnings, leans heavily on unproven bets in robotaxis and the Optimus humanoid robot.
Google Cloud Rockets 82% but Capex Burns Cash Cushion
Alphabet revenue climbed 24% to nearly $120bn, with cloud up 82% and net income quadrupling to $12bn. Search grew 17% and Gemini reached 950m monthly active users. But aggressive AI spending pushed free cash flow negative for the first time, and 2026 capex guidance was lifted to $85bn. Shares fell more than 4% during the earnings call.