AXIOS (Emily Peck) - Big Tech's AI spending is bigger than you think
To paraphrase Justin Timberlake in his iconic turn in the 2010 film "The Social Network," a trillion dollars isn't cool. You know what is? $3 trillion. The big picture: That's roughly how much money seven Big Tech companies, including Google, Microsoft and Nvidia, have committed to spending on AI-related infrastructure in off-balance-sheet commitments, according to a new analysis from Morgan Stanley. - And that's on top of the estimated $770 billion in debt and lease obligations that are on the balance sheets. Why it matters: The analysis finds that the total amount of spending on AI is much bigger than the already-mind-blowing headlines suggest, and — more of a red flag — it's more leveraged than is perhaps appreciated. How it…
Why is the timing of these AI investments a concern for investors according to Morgan Stanley?
It is currently unclear over what time period the $3 trillion will be spent or if it will be spent, as these are commitments and contracts that could theoretically be renegotiated. Todd Castagno, head of global valuation, accounting and tax at Morgan Stanley, noted that because this is a new market, questions remain regarding how these investments will pay off and how they will be financed.
Q&A ID 5a7810e1-56e9-4818-a2cc-450867537551
How do off-balance-sheet commitments function in the context of AI infrastructure spending?
Off-balance-sheet commitments are financial obligations that do not appear in a company's official tally of what it owns and owes; they are not official debt but rather an obligation to pay someone in the future. These commitments allow suppliers and data center developers to borrow against long-dated leases, guarantees, or purchase commitments from investment-grade hyperscalers to build capacity before payments are made or liabilities are recognized.
Q&A ID b2c6525e-54d4-45a9-9f02-2186f75d4896
How did Google's commitments change according to the Morgan Stanley research?
Google's commitments reached a total of $707 billion in the most recent quarter, a significant increase from $72.5 billion in all of 2025.
Q&A ID 32edbb9b-f4c0-40da-96ea-b0622dd89c61
What are the specific components of the $3 trillion in off-balance-sheet commitments made by these seven tech companies?
The hyperscalers have committed $1.1 trillion in payments for data center leases that have not yet begun, and all seven companies have agreed to $1.7 trillion in purchase commitments for items including chips, memory, and networking gear.
Q&A ID 42d2b063-584e-4238-9570-de0ec5984e87
