Goldman Sachs estimates that Google, Amazon, Meta, Microsoft, and Oracle will need to spend $5.8 trillion by 2030 building AI data centers and computing infrastructure.
Even for these tech behemoths, that's not all cash. The five companies have already issued nearly $200 billion in corporate bonds this year and borrowed another ~$90 billion through joint ventures for data centers.
Here's the catch: these bonds may all look like they're backed by Big Tech, but the actual protections vary wildly.
Some projects are fully guaranteed by Google — it'll take over the lease no matter what. Others only get rent at a discount. And some agreements give Google and tenants the right to walk away if construction is delayed by more than six months.
If a data center isn't finished on time, rent never starts flowing, and investors could get stuck with nothing.
Right now, the market isn't really pricing in those differences. Borrowing costs across projects are surprisingly similar. But as more data centers break ground, delays and cost overruns could trigger defaults on the weakest bonds first.