The credit rating agency Moody’s warns that the race to lead the Artificial Intelligence infrastructure is structurally transforming Big Tech’s business model—shifting from a historically software-centered model with high margins and little need for fixed assets to a capital-intensive one with physical infrastructure. This could threaten the credit quality of Amazon, Meta, Alphabet and other hyperscalers.
Spending speed is outpacing the pace at which AI generates direct revenue, forcing companies to rely on record corporate bond issuance and debt to finance data centers and chips. The market and credit agencies are beginning to demand returns proportional to the massive investments, in an environment marked by supply-chain bottlenecks and inflation in computing components.
Spending speed is outpacing the pace at which AI generates direct revenue, forcing companies to rely on record corporate bond issuance and debt to finance data centers and chips. The market and credit agencies are beginning to demand returns proportional to the massive investments, in an environment marked by supply-chain bottlenecks and inflation in computing components.