Full Breakdown
OpenAI's Partners Accumulate $96 Billion in Debt Amid AI Boom
11/28/2025, 9:05:15 PM
The Rising Debt Landscape in AI
A recent analysis by the Financial Times reveals that companies supplying data centers, chips, and processing power to OpenAI have collectively taken on approximately $96 billion in debt. This development underscores the AI sector's increasing reliance on debt financing, particularly in relation to the loss-making AI startup OpenAI.
OpenAI has committed $1.4 trillion to secure the energy and computing power necessary for its operations. However, the company anticipates generating only $20 billion in revenue this year. A report by HSBC indicates that even if OpenAI achieves revenues exceeding $200 billion by 2030, it will still require an additional $207 billion in funding to sustain its business.
Breakdown of Debt Among Key Players
The debt incurred by OpenAI's partners includes $30 billion borrowed by SoftBank, Oracle, and CoreWeave, alongside $28 billion in loans from Blue Owl Capital and Crusoe. Furthermore, there are ongoing discussions for an additional $38 billion in loans with Oracle and Vantage. The total debt across these entities highlights a significant shift in funding strategies within the AI industry, moving away from traditional cash reserves held by major tech firms like Microsoft, Alphabet, Amazon, and Meta.
CoreWeave, one of the key players, reported $3.7 billion in current debt and $10.3 billion in non-current debt, with future lease agreements for data centers amounting to $39.1 billion. Despite projecting only $5 billion in revenue for the year, CoreWeave claims to have a $56 billion revenue backlog.
Impact on Credit Markets
The surge in debt financing has notable implications for credit markets. According to Bank of America, the five largest hyperscalers—Amazon, Google, Meta, Microsoft, and Oracle—have collectively taken on $121 billion in new debt this year, which is significantly higher than the average of $28 billion issued annually over the past five years. This influx of investment-grade corporate debt is affecting credit spreads, as indicated by recent research from Deutsche Bank.
The increased supply of debt has led to a rise in credit default swap (CDS) yields, suggesting a heightened perception of default risk among investors. For instance, Oracle's five-year CDS has widened by approximately 60 basis points, while CoreWeave's has increased by around 280 basis points since September.
Criticism & Opposition
Critics of this debt-driven approach argue that the reliance on borrowed funds to fuel growth may pose long-term risks to the stability of these companies and the broader AI sector. Concerns have been raised regarding the sustainability of such financial strategies, especially for companies like OpenAI that have yet to achieve profitability.
Verbatim Quotes
- “This year … hyperscalers added another $63bn. This suggests the entire increase in supply this year is explained by [debt-funded M&A deals] and hyperscaler activity.” — Bank of America Analysts
- “The moves have been notable: Oracle’s 5yr CDS has widened by about +60bps to 104bps since late September and CoreWeave by roughly +280bps to around 640bps since September,” — Jim Reid, Deutsche Bank
The current landscape indicates that the AI boom is entering a new phase, characterized by increased scrutiny from investors and a growing dependence on external financing to meet capital expenditure needs.
