Alphabet, the owner of the Google search engine is about to raise 60 billion USDs in bonds in the last four months. It raised the money not only in USD, but also in British pounds, Canadian dollars Swiss francs and Japanese yen.
Other hyperscalers like Meta, owner of Facebook have borrowed intensively to finance the huge capital expenditures in artificial intelligence, AI.
Amazon, Alphabet, Meta and Microsoft plan, taken together to invest in AI and cloud infrastructure, i.e. AI data centers and energy to power these data centers 750 billion USDs in 2026 alone according to their latest quarterly reports!
Much of the money will be borrowed.
No one from Amazon, Alphabet, Meta and Microsoft apparently wants to miss on the artificial intelligence, AI data center wave. Fear Of Missing Out, FOMO is rife in Silicon Valley. Apparently according to most of the leading technologists and technology investors it will be one winner to rule them all. Or at most 2.
The artificial intelligence, AI fourth industrial revolution will have many winners in hardware, software, energy infrastructure, according to Wolfteam Ltd.'s projections and estimates.
Amazon, Alphabet, Meta and Microsoft have fortress balance sheets with tens of billions of USDs of cash on them in each case.
However, the planned 750 billion USDs in investment is a huge sum of money and Amazon, Alphabet, Meta and Microsoft could easily run into hundreds of billions of USDs of debt which could threaten their operational excellence, namely to produce huge multi billions of USD of revenue and profit.
In end effect over-extension of AI investment could threaten the existence of Amazon, Alphabet, Meta and Microsoft if artificial intelligence, AI does not produce the envisaged benefits in productivity. A large increase in expected productivity could bring huge increases in revenue and profit for Amazon, Alphabet, Meta and Microsoft.
But this is only a rosy, positive assumption, expectation. If it does not come true or even comes true partially the very existence of Amazon, Alphabet, Meta and Microsoft could be threatened if they go on to burrow hundreds of billions of USDs.
One should bear in mind the non negligible probability of recession caused by let's say high oil prices, a new geopolitical conflict, a pandemic, banks bringing onto their balance sheets trillions of USDs of off balance liabilities, limit of chip technology production, sharp drop in technological productivity, etc.
All these events, if they cause a deep global recession will decrease by tens of percentages the revenues and profits of Amazon, Alphabet, Meta and Microsoft or even drive them in net losses, which could threaten Amazon, Alphabet, Meta and Microsoft's very existence.
But for nor, the positive and full of optimism artificial intelligence, AI train is going in full speed ahead.
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