Hyperscalers Off-Balance Sheet Debt is exploding. over 1.5T

Creative financing has truly returned to the world of debt markets not seen since the global financial crisis. Shell companies are hiding the massive costs of tech's data center rollouts and commitments that are not showing up on their balance sheets.

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S&P Global calculated that hyperscalers and “related entities” like Nvidia have issued $225 billion in bonds so far in 2026, representing a 973.7% jump through midyear. They are on pace to issue $400 billion for the full year. But markets are showing signs of fatigue, after absorbing this flood of debt in such a short time, S&P warned, pointing out that hyperscalers are now paying a higher premium compared with yields on risk-free bonds.

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According to a study by Nikkei, so-called hidden debt at U.S. tech giants has exploded by 8x in just four years to $1.65 trillion

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That amount doesn’t appear on balance sheets and even exceeds the $1.35 trillion in debt that does appear on their books.

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Much of the hidden debt will also become official at some point, especially when data centers start operations.

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Fortune Source

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Beignet Investor LLC (backed primarily by Blue Owl Capital) owns an 80% stake in Meta’s Hyperion AI data center campus in Richland Parish, Louisiana, while Meta owns the remaining 20%

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However, if Meta walks away or chooses not to renew, a Residual Value Guarantee triggers. Meta must make a massive cash payment (up to a $13 billion threshold) to compensate Beignet Investor LLC if the physical data center cannot be resold to cover the outstanding bond principal.

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Meta keeps the $27 billion debt off its balance sheet by exploiting specific corporate governance and lease accounting loopholes under US GAAP. By avoiding direct borrowing, Meta preserves its key credit ratings and protects its headline financial ratios from being weighed down by massive AI infrastructure deb

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Meta did not borrow the money; the joint venture company, Beignet Investor LLC, issued the bonds

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International Finance Review

One small example of what type of deals are exploding across the entire space. I think its clear we cant take the current "fortress balance sheets" at face value.

Creative accounting plays like this exist for a reason..