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With only $58.7 billion in long-term debt officially recorded on its balance sheet, Meta Platforms (META) may actually be carrying a far heavier financial burden than investors realize. According to a recent investigation by Nikkei Asia, Meta’s off-balance-sheet debt had swelled to approximately $420 billion by the second quarter of 2026 — nearly three times its reported book debt. This “invisible leverage” is accumulating rapidly as the company pours money into AI infrastructure.
Meta is not alone in this predicament. Together with Alphabet, Amazon, Microsoft, and Oracle, these five technology giants have accumulated a combined $1.65 trillion in off-balance-sheet debt, largely driven by long-term data center leases, GPU purchase commitments, and joint venture arrangements. That figure has surged eightfold in roughly four years and now exceeds their total on-balance-sheet debt. These obligations are permitted under accounting rules to remain off the balance sheet, disclosed only in footnotes to financial statements, leaving investors struggling to assess the true risk exposure.
Among the key drivers of Meta’s off-balance-sheet expansion is the Hyperion data center project in Louisiana. Initially budgeted at $27 billion and developed through a joint venture with asset manager Blue Owl Capital — with Meta holding 20% and Blue Owl owning the remaining 80% — the project was expanded in June of this year from 2 gigawatts to 5 gigawatts of capacity, pushing total investment to roughly $50 billion. Through a complex joint venture and lease structure, the project’s debt is kept off Meta’s books, allowing the company to secure computing capacity while preserving its reported credit metrics.
However, these off-balance-sheet arrangements are now facing increased accounting and risk scrutiny. Meta has provided what amounts to a “residual value guarantee”: if it does not renew or terminates a lease early, it must compensate bondholders for outstanding amounts. This is effectively an implicit guarantee, yet Meta’s accounting treatment argues that renewal is “not reasonably certain,” thereby classifying the leases as operating leases rather than finance leases to minimize on-balance-sheet liabilities. Critics have described this approach as a logical paradox — one that requires accepting multiple mutually contradictory assumptions simultaneously.
On the financial front, Meta’s capital expenditures are escalating sharply. The company spent $72 billion on capex in 2025, and has raised its 2026 guidance to a range of $125 billion to $145 billion. This massive spending is already weighing on the income statement — the market expects the second-quarter earnings report, due July 29, to show margin pressure. Evercore analyst Mark Mahaney recently suggested that Meta may not be aiming to compete head-to-head with Amazon, Microsoft, and Google in the foundational cloud market, but rather intends to challenge neocloud providers such as CoreWeave in the AI-specific computing segment, including AI chips and systems.
The Bank for International Settlements issued a warning in March about “shadow borrowing” in AI infrastructure buildouts, while Moody’s quantified in a February report that the five companies have $662 billion in future data center lease commitments. The core risk lies in maturity mismatch: AI hardware faces technological obsolescence within 18 to 36 months, yet data centers are traditionally financed over 10- to 15-year terms. If AI commercialization proves slower than the pace of capital spending, the convergence of off-balance-sheet debt maturities and asset impairments could erode corporate profits.
For investors, Meta’s upcoming earnings report next week may serve as a critical window to assess how the market is pricing in these “hidden liabilities.”
