Big Tech expands AI financing guarantees as off-balance-sheet exposure reaches $300bn

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Big Tech expands AI financing guarantees

Highlights

Technology companies have provided up to $300bn in residual value guarantees over the past year to back AI-related infrastructure via special-purpose vehicles.
Projects with these guarantee structures typically price at premiums of 100–150 basis points over the guarantor's debt, as seen in deals including Broadcom's $29bn exposure and Nvidia's $105bn to SB Energy.
Morgan Stanley estimates over $3.1tn in off-balance-sheet commitments among key hyperscalers and chipmakers, raising credit risk concerns as AI infrastructure investments outpace cash flow.

Guarantee structures reshape AI funding

As reported by Financial Times, technology companies have offered as much as $300bn of residual value guarantees over the past 12 months to support AI-related infrastructure financing. These arrangements let special-purpose vehicles, rather than the tech groups themselves, issue debt backed by data centres or chips, while the corporate guarantors commit to cover part of the future value risk.

Bankers describe the model as balance-sheet efficient because it allows companies to use their credit strength without fully booking the liabilities. Lenders gain protection against the risk that fast-changing technology could lose value quickly, and projects supported by these guarantees typically price at a premium of about 100 to 150 basis points over the guarantor's own debt, according to people familiar with the matter.

Meta first used the structure last autumn on a large data centre project. Broadcom later adopted it in June, taking on $29bn of exposure to sell 1GW of chips to a special-purpose vehicle that will lease them to Anthropic, as part of a vendor-financing programme developed with Google.

Nvidia has also extended $105bn in guarantees to SB Energy, a SoftBank subsidiary building a data centre campus in Ohio for OpenAI. Under that arrangement, Nvidia records no balance sheet liability until OpenAI's leases begin in 2028, while the campus is set to run Nvidia hardware exclusively for 20 years.

Credit implications grow for tech sector

The wider use of guarantees is adding to concerns about how much risk large technology groups are carrying beyond their reported balance sheets as AI spending plans outpace cash flow. Morgan Stanley analysts have estimated more than $3.1tn in off-balance-sheet commitments and credit support across seven hyperscalers and chipmakers.

Credit analysts warn that the exposure could become more significant if AI demand disappoints, computing capacity becomes oversupplied or companies fail to build durable business models around the technology. Doug Colandrea, senior director at KBRA, says there has been a significant expansion in off-balance-sheet exposure over the past year, increasing the complexity of credit risk profiles.

Rating agencies say the guarantees are not ignored in leverage analysis even if they remain mostly off balance sheet under accounting treatment. S&P analysts adjust their figures by adding the portion of the guaranteed value that exceeds their own estimate of what the chips or data centres would fetch in a stressed sale.

Meta's own structure includes a $28bn residual value guarantee for its joint venture with Blue Owl on the 2GW Hyperion data centre in Louisiana. The project spans 4mn square feet and is expected to come online by 2030, with power demand roughly equivalent to supplying about 1.5mn homes.

In our earlier coverage of Nscale’s planned U.S. IPO, we explained how the London-based AI cloud provider is seeking a public listing amid heavy investment in AI computing infrastructure. We also noted that Nvidia’s backing included not only funding and leasing commitments, but also a guarantee of part of Nscale’s lease obligations—highlighting how credit support structures are increasingly used to underpin data-centre expansion as market sentiment turns more cautious.

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