Moody's Warns of Credit Risk for Amazon, Meta, Alphabet Due to AI Spending

Moody's Warns of Credit Risk for Amazon, Meta, Alphabet Due to AI Spending

Moody's Ratings has warned that the rapid spending on artificial intelligence infrastructure is threatening the credit quality of tech giants Amazon, Meta, Alphabet, and others. The companies are being forced to rely heavily on debt and off-balance-sheet moves to fund their AI spending, which is eroding their free cash flow and increasing balance-sheet risk. Moody's said that the spending surge is unprecedented and is having a significant impact on the companies' financial health. The ratings agency warned that the companies may struggle to maintain their credit quality in the face of this spending surge.