Hyperscaler data center commitments and credit stress

Five major tech companies, Alphabet, Meta, Microsoft, Amazon, and Oracle, hold over $3 trillion in future data center commitments, with $1.3 trillion in leases, roughly 70% of which was added in the last four quarters. Meta and Google led the newest lease additions since mid-2025. Alphabet alone holds more than $1 trillion in commitments, nearly 8 times its level a year earlier, spanning technical equipment, energy, and leases. Meta's $810 billion in commitments includes nearly half in unstarted data center leases running up to 30 years.

For 2026, the Big-5 hyperscalers, Amazon, Alphabet, Meta, Microsoft, and Oracle, are on track to spend $780 to $800 billion in combined capital expenditure, approximately three times their 2024 levels, with roughly 75% earmarked for AI-specific infrastructure. Amazon leads 2026 guidance at approximately $220 billion; Alphabet guides $195 to $205 billion.

Google acquired Crusoe Energy's southeast Wyoming campus, known as Project Tembo, one day after announcing a $17 billion state investment. The site covers about 716 acres and is built around 2.7 GW of power capacity with four data center halls planned; initial operations target the second half of 2028 with full build-out expected by 2031. Google also contracted with AEP for a 702 MW fuel cell development with carbon capture.

Projections from multiple sources differ in scope but point in the same direction. Milk Road Pro estimates combined annual capex from Google, Microsoft, Amazon, Meta, Oracle, SpaceX, CoreWeave, and Nebius rising from $280 billion in 2024 to $951 billion in 2026 and $1.5 trillion by 2028, with an estimated $3.8 trillion in combined spending between 2026 and 2028 alone. McKinsey projects $6.7 trillion in global data center capex by 2030, with AI workloads driving roughly 70% of demand. Dell'Oro Group forecasts total worldwide data center capex reaching $1.7 trillion cumulatively by 2030, growing from approximately $434 billion in 2024 to over $1 trillion by 2029.

Credit markets show signs of stress from the scale of this buildout. Oracle's 5-year credit default swap spread has more than tripled since September 2025, with trading volumes on Oracle credit instruments surging well above prior norms; the concern centers on the company's highly debt-funded approach. AI-related bonds now represent 18% of the investment-grade corporate bond index, the largest single sector, with data centers accounting for an additional 2%. Traditional sectors including banking at 17%, financial services at 10%, healthcare at 10%, and utilities at 10% all trail AI-related issuances.

Annual data center power additions from AI accelerator sales are projected to grow from 9 GW in 2024 to 104 GW by 2030, an 11-fold increase, with average rack-level power density expected to rise from roughly 40 kW to over 280 kW over that period.