These commitments indicate that a significant portion of Big Tech’s spending on AI has already been secured, without being reflected as debt-like lease liabilities on their balance sheets.
If demand for AI computing continues to grow, these facilities will be vital for the next stage of cloud expansion. Conversely, if demand wanes, these companies might find themselves paying for extensive and expensive long-term capacity that is hard to divest.
This total is nearly four times the approximately $285 billion in lease liabilities currently recognized on the companies’ financial statements, based on filings compiled by Reuters.
This discrepancy is due to accounting practices. Leases typically are not recorded as liabilities until the facility is operational. Until that point, companies disclose future payments in their financial notes.
The commitments are transparent, and rating agencies might already factor some of them into their analyses. However, their magnitude highlights how much of the AI infrastructure has yet to be reflected in reported lease liabilities, fixed charges, and leverage ratios.
The $1.09 trillion cannot be simply added to existing debt. Uncommenced lease commitments represent undiscounted payments allocated over multiple years, while recognized lease liabilities account for their present value.
Oracle appears to have the highest concentration risk, disclosing $260 billion in uncommenced commitments, nearly seven times its $37.89 billion in recognized lease liabilities. These commitments are largely for data centers expected to commence between fiscal 2027 and fiscal 2029, with terms typically extending 15 to 19 years.
Oracle has cautioned that the length, renewal terms, and pricing of its data center leases may not align with customer contracts, putting it at risk should customers not renew or fulfill their obligations.
At the end of May, Oracle’s borrowings were approximately 4.4 times its trailing EBITDA, according to a Reuters analysis of LSEG data and company filings. Including recognized operating and finance lease liabilities increased that ratio to around 5.7 times.
S&P Global Ratings noted that it included Oracle’s $260 billion in uncommenced leases in its adjusted-debt forecasts and anticipated leverage to be roughly 4.4 in fiscal 2027.
Microsoft showcased the largest disclosed pipeline at $329.1 billion, compared to $88.52 billion in recognized lease liabilities.
Meta reported $278.99 billion in uncommenced operating and finance lease payments, followed by an additional $68 billion in data-center leases signed in July, raising the known pipeline for the five companies to approximately $1.16 trillion, including those later agreements.
Alphabet disclosed $85.2 billion in uncommenced leases, while Amazon reported $137.21 billion. Amazon’s figure is less directly comparable as its lease portfolio also encompasses warehouses, offices, aircraft, and vehicles.
