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How tech’s biggest companies are offloading risks of the AI boom

Meta is investing billions in new data centres, like one being constructed in Eagle Mountain, Utah.

Meta is investing billions of dollars in new data centres, such as the one (above) being constructed in Eagle Mountain, Utah.

PHOTO: CHRISTIE HEMM KLOK/NYTIMES

Karen Weise and Eli Tan

Tech giants like Microsoft & Meta are offloading AI data centre investment risk onto smaller firms via creative financing deals, like Meta's "renting" data centres.
Microsoft is using shorter-term "neocloud" deals to gain computing power quickly, exemplified by deals with Nebius, Nscale, Iren and Lambda, providing flexibility.
Companies like CoreWeave are taking on billions in debt to build AI computing capacity linked to tech giants, highlighting potential risks if AI demand slows.

AI generated

SEATTLE/SAN FRANCISCO – This autumn,

Microsoft announced a series of deals

, totalling tens of billions of dollars, to lease computer power for its artificial intelligence (AI) ambitions. Meta secured almost US$30 billion (S$38.7 billion) in financing to build a massive data centre in Louisiana without taking on the debt itself. Google also committed to renting computing power from a small company and then selling some of it to OpenAI.

Those deals had one thing in common: They allowed companies that make massive quarterly profits to reduce their financial exposure to the frenetic, global build-up of data centres.

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