Global Tech Giants Lock in US$1.09 Trillion in Data Centre Commitments Amid AI Boom

Five global technology giants—Microsoft, Meta Platforms, Oracle, Amazon, and Alphabet—have locked in future lease commitments worth approximately US$1.09 trillion, equivalent to Rp18,000 trillion. The majority of these funds are allocated for the construction and leasing of data centres to support the surging computational demands of artificial intelligence. According to a Reuters report citing company documents, these jumbo commitments indicate that most of Big Tech’s AI capital expenditure has been tied up in long-term lease contracts. However, these financial obligations have not yet been fully recorded as lease liabilities on the companies’ balance sheets. If demand for AI computing continues to soar, these data centre facilities will become the primary foundation for the next growth phase in the cloud sector. Conversely, if AI demand weakens, the companies remain obligated to pay for massive, high-cost data centre capacity that is difficult to terminate mid-stream. Reuters noted that the value of these uncommenced lease commitments is nearly four times greater than the roughly US$285 billion in lease liabilities already recognised in the five companies’ financial reports. This discrepancy arises from accounting treatment, as signed lease contracts are generally not recorded as liabilities until the physical facilities are actually ready for use. Before that stage, companies are only required to disclose future payment plans in the notes to the financial statements. Among the five companies, Oracle holds the greatest level of risk. The company disclosed uncommenced lease commitments of US$260 billion, nearly seven times its recognised lease liabilities of US$37.89 billion. Most of Oracle’s commitments relate to data centres expected to begin operations between fiscal years 2027 and 2029, with long-term contract durations ranging from 15 to 19 years. Based on Reuters’ analysis of LSEG data and company documents, Oracle’s debt ratio stood at approximately 4.4 times EBITDA at the end of May. When recognised operating and finance lease liabilities are included, the ratio surges to around 5.7 times. S&P Global Ratings stated it has incorporated Oracle’s US$260 billion in lease commitments into its adjusted debt projections, estimating the company’s leverage to be in the range of 4.4 times in fiscal year 2027.