Big Tech is backing as much as $300 billion of AI infrastructure debt with guarantees while keeping much of the exposure off balance sheets by using some clever accounting.
According to the Financial Times Meta, Nvidia and Broadcom are increasingly using residual value guarantees and special-purpose vehicles to finance expensive chips and data centres.
The accounting trick involves promising that assets will retain a minimum value. Outside investors can then lend against the kit, while the technology company provides financial support without borrowing the full amount.
Meta used the structure for its Hyperion data centre project in Louisiana. The company formed a venture with funds managed by Blue Owl Capital, retaining 20 per cent while Blue Owl took 80 per cent. Meta signed leases for the completed facilities and supplied a residual value guarantee which initially starts at about $28 billion and declines over time. If leases end and the campus is worth less than an agreed threshold, Meta could be required to cough up the difference.
Broadcom has gone down a similar rabbit hole to support AI rack deliveries to Anthropic. Its maximum potential liability under one backstop arrangement is approximately $29 billion. Broadcom’s liability would not be the full $29 billion cheque. If the customer defaults, Broadcom would face the difference between 85 per cent of outstanding backstopped lease amounts and whatever the recovered AI racks fetch when sold. No payments had been made under the arrangement when Broadcom filed its latest figures.
Nvidia has produced the largest individual example, agreeing to guarantees capped at $105 billion for an OpenAI data centre campus SB Energy is developing in Ohio. The guarantees support about 4.25 GW of IT capacity.
The obligations come into force in stages as nine phases are completed, with the first expected during Nvidia’s 2029 financial year. OpenAI’s leases run for 20 years and the guaranteed amount declines as payments are made.
In return for putting its balance sheet within shouting distance of the deal, Nvidia gets the useful detail that the site will exclusively host its AI infrastructure, subject to limited exceptions. Nvidia holds an option to support roughly another 3.8 GW as the campus expands.
The structures are attractive because the special-purpose vehicles take on much of the direct debt while the technology companies supply contingent guarantees. Credit rating agencies are less easily satisfied and can adjust leverage calculations when the promised residual value looks more optimistic than the assets’ stressed value.
So far those adjustments have generally been limited, according to the Financial Times, because the assets still cover much of the underlying borrowing. Broadcom’s exposure falls as lease payments arrive, Meta’s $28 billion threshold declines over time and Nvidia’s guarantee shrinks throughout OpenAI’s 20-year leases.
