S&P Global Ratings has published new research examining how the world’s largest hyperscalers are financing rapid AI infrastructure expansion and the implications for future credit quality.
The report, “S&P Global Ratings’ View On Artificial Intelligence And Hyperscalers“, examines how Alphabet, Amazon, Microsoft, Meta, Oracle and SpaceX are funding this investment cycle.
“As AI infrastructure investment accelerates, the focus is expanding beyond the scale of spending to the funding models, financial commitments and long-term implications that accompany it,” says Naveen Sarma, MD and sector lead at S&P Global Ratings. “Understanding how these investments are financed and managed will be increasingly important in assessing credit quality across the sector.”
Additional findings in the report include:
- S&P Global Ratings expects all six hyperscalers to generate negative free operating cash flow in 2026 and 2027 with recovery not projected until 2029.
- Hyperscalers are increasingly utilizing debt, equity issuance, lease commitments and other financing arrangements to support AI infrastructure investments.
- The growing use of joint ventures, special purpose vehicles (SPVs), residual value guarantees (RVGs) and other structures is increasing the complexity of credit analysis.
- Key areas being monitored include monetization of AI investments, demand durability, overcapacity risk and the treatment of contractual commitments and other debt-like obligations.
- S&P Global Ratings’ models generally assume a 2028 inflection point, with revenues accelerating and capital expenditure growth moderating as monetization improves.
Consistent with its mission of bringing transparency to credit markets, S&P Global Ratings will continue to analyze the investment, financing, and monetization trends shaping the AI ecosystem and their implications for credit quality.