AI Infrastructure to Cost $5.8 Trillion, Bond Market May Underestimate Risk of Abandonment

According to Dongcha Beating monitoring, Goldman Sachs estimates that by 2030, Google, Amazon, Meta, Microsoft, and Oracle will invest $58 trillion in building AI data centers and computing facilities.

Even these tech giants cannot rely solely on cash. The five companies have issued nearly $200 billion in corporate bonds this year and have borrowed about $90 billion through joint ventures for data centers.

The issue is that these bonds appear to be backed by the big names, but the actual guarantees vary significantly.

Some projects have Google fully taking over the lease. Some can only collect rent at a discounted price. There are also projects where if construction is delayed by more than six months, Google and the tenant can exit directly.

If a data center is not completed on time, rent will not start being paid, and investors may not get their money back.

However, the current market does not carefully distinguish these risks, and the borrowing rates for different projects are not significantly different. As more data centers begin construction, delays and cost overruns could cause some bonds to default early.