Moody's warns AI spending spree is eroding credit quality of Amazon, Meta and Alphabet

Rating agency Moody's has released a sobering report highlighting the unprecedented scale of investment by major technology companies into artificial intelligence infrastructure. According to analysts, Amazon, Meta, Alphabet and several other corporations are resorting to bond issuances, additional stock sales and off-balance-sheet financing arrangements to fund their race for AI supremacy. The agency stresses that even companies sitting on massive cash piles cannot cover such expenditures solely from internal resources. This dynamic creates tangible risks to their credit quality and could potentially lead to rating downgrades. Investors holding securities of these issuers should closely monitor debt levels in upcoming quarterly earnings reports.