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AI Balance-Sheet Commitments Raise Questions About Hidden Risks
Big technology companies are building many data centres to support artificial intelligence.
Some future costs are disclosed in notes rather than counted as debts on their balance sheets yet.
Those commitments add up to a very large amount, and some may still have to be paid even if plans change.
The companies hope that AI services will earn enough money to cover the bills.
But much of the expected income depends on just two AI companies, OpenAI and Anthropic.
Another accounting question is whether a company should count a related business’s debts as its own.
Experts disagree about how worrying these arrangements are, and companies do not all account for them the same way.
The article says rules are stronger than they were during Enron, but investors still need to examine the details carefully.
Hyperscalers’ off-balance-sheet obligations for future data-centre leases, infrastructure and energy total about $2.9 trillion, according to the article.
The companies have about $126 billion in combined net cash and $724 billion in trailing 12-month operating cash flow; some have also issued substantial debt.
Revenue backlogs total about $2.5 trillion, but roughly 40 per cent is expected from OpenAI and Anthropic, raising concerns about customer concentration and their ability to fund commitments.
Michael Burry warned that off-balance-sheet commitments could quickly become liabilities, while Steve Eisman said VIE structures reminded him of Enron; the article says the comparison may be overstated given stronger rules today.
Companies differ in whether they consolidate variable interest entities; Meta’s Hyperion data-centre arrangement drew special attention from auditor EY, which identified the judgment as a critical audit matter.
- Who
- Major hyperscalers and AI companies, including Amazon, Alphabet, Microsoft, Meta, Oracle, OpenAI and Anthropic; investors Michael Burry and Steve Eisman also raised concerns.
- What
- An analysis of off-balance-sheet obligations and variable interest entities in the AI industry, and the risks and accounting judgments associated with them.
- Where
- Primarily the United States, including Project Jupiter in Doña Ana County, New Mexico.
- When
- Published October 10, 2026; the article also discusses developments in 2025 and 2026.
- Why
- AI data centres and computing infrastructure require large commitments, while investors assess whether future AI revenue can support those costs and how related entities should be reported.
Warnings about accounting and financial risk
Reasons the risks may be manageable
Off-balance-sheet commitments
Warnings about accounting and financial risk
Michael Burry warned that these liabilities are growing rapidly and could become real obligations quickly; the article notes that commitments are large relative to current net cash.
Reasons the risks may be manageable
The companies have substantial operating cash flow and expect AI-related revenue to support their commitments; disclosed revenue backlogs total about $2.5 trillion.
VIEs and Enron comparisons
Warnings about accounting and financial risk
Steve Eisman said off-balance-sheet debt and VIEs reminded him of Enron; critics also point to the role of management judgment in deciding whether to consolidate entities.
Reasons the risks may be manageable
The article says modern regulations and disclosure requirements are more stringent than those in Enron’s era and considers a direct comparison potentially far-fetched.
Key facts
- Off-balance-sheet obligations
- About $2.9 trillion in undiscounted future lease, infrastructure and energy payments, according to the article.
- Combined net cash
- About $126 billion for the hyperscalers discussed.
- Trailing 12-month operating cash flow
- About $724 billion combined.
- Revenue backlog
- About $2.5 trillion in remaining performance obligations; roughly 40 per cent is expected from OpenAI and Anthropic.
- Project Jupiter
- Four planned data centres in Doña Ana County, New Mexico, forming part of the $500-billion Stargate project.
- Oracle–OpenAI arrangement
- A multi-year deal valued at $300 billion, according to the article.
- Meta–Hyperion lease
- Initially $12 billion over four years, with Meta holding options to renew for up to 20 years.
Quotes
Michael Burry
Investor known for short positions in AI-related stocks.
“When the music’s over, these off-balance sheet commitments become real liabilities very quickly”
thehindubusinessline.com
Sources
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