The rent that major global information technology (IT) corporations will have to pay going forward to secure artificial intelligence (AI) data centers has surpassed $1 trillion. There are concerns that if AI demand falls short of expectations, corporations could have to shoulder massive expense for a long period.
According to Reuters on the 4th (local time), the amounts that Microsoft, Meta, Oracle, Amazon, and Alphabet—five corporations—have agreed to pay in the future for facilities whose leases have not yet commenced total about $1.09 trillion (1,554 trillion won). Most of the contracts are related to AI data centers.
This is close to four times the approximately $285 billion in lease liability that the five corporations have already recorded as liabilities on their financial statements. Including the $68 billion data center lease that Meta additionally signed in July, the total rises to about $1.16 trillion (1,653 trillion won).
Even if a corporation signs a lease, it generally does not record it as a lease liability until the facility is actually available for use. Instead, it discloses the future payments in the notes to the financial statements. For this reason, a considerable portion of the future burden related to AI investment has not yet been reflected as liabilities on the financial statements.
Big Tech corporations are building or leasing large-scale data centers to run AI services such as chatbots and cloud. Because AI must process large amounts of information quickly, it requires numerous high-performance semiconductors and the facilities to run them.
By corporation, Microsoft has the largest future payments. Under lease agreements that have not yet begun, the amount to be paid going forward is $329.1 billion. The lease liability currently recorded on its financial statements is $88.52 billion.
Meta had previously disclosed $278.99 billion in payments. To that, a newly signed $68 billion data center lease in July was added.
Oracle's payments are $260 billion, about seven times its currently recorded lease liability of $37.89 billion. It is the corporation whose future payments are the largest relative to its current lease liability.
Most of Oracle's contracts are related to data centers. The leases are scheduled to begin between fiscal years 2027 and 2029, and the contract terms are generally 15 to 19 years.
Alphabet's payments are $85.2 billion, and Amazon's are $137.21 billion. However, Amazon's leased assets include not only data centers but also logistics warehouses, offices, aircraft, and vehicles, making direct comparison with other corporations difficult.
Reuters noted that depending on the trajectory of AI demand, these contracts could form the growth foundation for Big Tech, but they could also become a long-term expense burden. If demand for AI computing continues to rise, data centers can support the growth of cloud businesses, but if demand falls short of expectations, corporations will have to shoulder rent for facilities that are difficult to scale down or dispose of for an extended period.