--- title: "Google's parent company and other tech giants may each incur debts of hundreds of billions of dollars" type: "News" locale: "zh-CN" url: "https://longbridge.com/zh-CN/news/277172614.md" description: "Alphabet, Google's parent company, Amazon, and Meta have recently raised hundreds of billions of dollars through the bond market, primarily for investments in AI data centers. It is expected that in the coming years, these three companies will continue to incur debt, with capital expenditures approaching or exceeding cash flow. S&P estimates that each company could borrow an additional $200 billion without affecting their credit ratings. Although credit ratings are safe in the short term, the trend of high debt and shrinking cash flow may alter the financial structure of tech companies" datetime: "2026-02-27T09:21:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/277172614.md) - [en](https://longbridge.com/en/news/277172614.md) - [zh-HK](https://longbridge.com/zh-HK/news/277172614.md) --- > 支持的语言: [English](https://longbridge.com/en/news/277172614.md) | [繁體中文](https://longbridge.com/zh-HK/news/277172614.md) # Google's parent company and other tech giants may each incur debts of hundreds of billions of dollars Author: Anita Ramaswamy In recent months, Amazon, Google's parent company Alphabet, and Meta have raised hundreds of billions of dollars through the bond market for massive investments in AI data centers. In the coming years, these three companies are likely to continue borrowing heavily — their projected capital expenditures are now close to or even exceeding their generated cash flow. How much more can they borrow without facing credit rating downgrades and rising financing costs has become a key question. Currently, the rating agency S&P estimates that by the end of this year, the debt of these three companies will be slightly higher than their cash, which is the opposite of the current situation. However, according to S&P's assessment model, in the long term, **each of these companies can still borrow nearly $200 billion while maintaining their current credit ratings**. **Key Points Summary** - Large tech companies can each borrow up to **$200 billion** and still maintain their current ratings. - AI investments are turning tech giants into **more highly indebted** companies. - The credit ratings of tech giants are likely safe for the next two years, but risks remain. The shift of companies towards heavy borrowing to support expansion highlights that the AI boom may **permanently change** the financial structure of leading tech companies. They are no longer in a model that generates massive cash, diversifies, and conducts large-scale stock buybacks, but are instead moving towards a state of **high debt and significantly reduced free cash flow** — at least for the next few years. S&P and Moody's assess credit ratings by comprehensively examining existing debt, profitability, and the future trends of related ratios. Currently, both agencies give Alphabet an investment-grade rating higher than Meta and Amazon: Alphabet is rated **AA+ / AA2**; Meta is the lowest, with S&P giving it **AA-** and Moody's giving it **AA3**. This reflects that rating analysts believe Meta is overly reliant on advertising, with less diversification compared to Alphabet and Amazon, which have high-profit cloud businesses and other diversified segments. Both rating agencies have stated that they do not expect to downgrade these tech companies' ratings in the coming years. S&P Global Ratings Director Jawad Hussain stated that, for example, with Alphabet's AA+ rating, as long as its **debt/EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio does not exceed 1x**, the rating is likely safe. Currently, Alphabet's ratio is 0 because its cash exceeds its debt. Analysts expect Alphabet's EBITDA to reach **$216 billion** this year. A 1x debt/EBITDA ratio means that after deducting cash, Alphabet can still bear about **$200 billion in debt** By the end of 2025, the company's debt will be $46 billion, and cash will be $126 billion. Alphabet expects capital expenditures of approximately **$180 billion** this year, which will consume most of its expected cash flow. Additionally, the company will complete the acquisitions of cybersecurity company Wiz and data center infrastructure company Intersect, totaling $37 billion. As a result, S&P predicts that by the end of 2026, Alphabet's debt will exceed its cash by **$16 billion**, with a debt/EBITDA ratio between **0.1 and 0.2 times**. This forecast assumes that Alphabet's total debt at year-end will be $117 billion (including data center leases counted as debt by S&P), and cash will be $102 billion. S&P's latest forecast indicates that in 2026 and 2027, the debt/EBITDA ratios for Alphabet, Amazon, and Meta **will not exceed 0.5 times**, suggesting that credit ratings will be relatively safe over the next two years. However, Hussein also warns that the companies face a risk: if cash flows continue to decline, or if S&P determines that corporate AI investments **are yielding insufficient returns**, it may **readjust** the downward threshold for the debt/EBITDA ratio to 1 time. Christian Hoffman, head of fixed income at Sandberg Investment Management, stated that given these companies' plans to significantly increase capital expenditures this year, **there is indeed a possibility of a rating downgrade**. However, he also added, "Current debt costs are not high, and frankly, even if the rating is downgraded by one level, the financing costs will not be excessively high." Hoffman believes that although there is currently **strong demand** for tech debt in the market, "there will come a day when investors choose to pull back," which will be reflected in the widening of tech debt spreads (the difference between bond yields and U.S. Treasury yields). 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