In a July 21 X post, the famous ‘Big Short’ trader, Michael Burry, drew attention to a study showing that big tech’s overall debt significantly exceeds the fully disclosed figures.
Specifically, the legendary investor highlighted a recent Nikkei Research study that found that just five U.S. technology giants carry as much as $1.65 trillion in so-called ‘hidden debt’ – burden that does not appear on the balance sheet thanks to a wide variety of obfuscating methods.
The figure is made only more alarming once its growth is taken into account. Indeed, as recently as 2022, the number stood in the low hundreds of billions and has been steadily accelerating, with the 2026 balance anticipated to be roughly twice as high as in 2025.
Oracle debt soars 30x on OpenAI data center commitment
Elsewhere, examining the Nikkei report more closely reveals that Meta’s (NASDAQ: META) off-balance-sheet debt is especially high at $420 billion, while Oracle’s (NYSE: ORCL) has been rising at a particularly rapid rate.
According to the study, Oracle saw its burden soar roughly 30-fold over four years, reaching $273.3 billion by the end of May.
Notably, the firm might be particularly exposed to any adverse developments in the wider AI space, considering its ability to pay back the debt is mostly reliant on the future profitability and success of OpenAI.
Simultaneously, leaked financials for 2024 and 2025 for Sam Altman’s firm strongly hint that the company might not be able to pay Oracle in time, if at all.
Meanwhile, recent developments showcase both the continued confidence blue-chip technology giants have in the eventual benefits of their vast infrastructure investments and the strain the greater program has put on credit providers.
Alphabet (NASDAQ: GOOGL) – one of the firms included in the $1.65 trillion total – recently made its first equity offering in roughly two decades, raising over $80 billion from Warren Buffett and other investors across the market.
Possible signs of strain are also evident with the last two examined companies – Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) – as both have been undertaking significant layoffs in what some critics speculate are attempts to save cash to facilitate continued CapEx.
Could big tech ‘hidden debt’ report indicate Burry will cash in on his Nvidia stock position?
As for Michael Burry, the $1.65 trillion in hidden debt for some of the biggest technology firms involved with the ‘AI boom’ appears to back his long-standing thesis that the prevailing situation in the market is unsustainable.
The legendary short trader drew much scrutiny in recent years with his attempts to bet against the semiconductor industry, and his more recent wagers that Nvidia (NASDAQ: NVDA) and Palantir (NASDAQ: PLTR) stocks would experience a decline have, so far, been offering mixed results.
Lastly, the situation might shift once again already in July as nearly all companies included in the study are set to report their quarterly earnings, with the probable continuation of the trend possibly proving especially damaging given that big tech owes much of its popularity to historically being asset-light and cash-heavy.
Featured image via Shutterstock
