It has just been revealed that the 5 biggest US tech companies have $1.65 trillion in hidden debt. Those companies are Meta (Facebook), Oracle, Amazon, Microsoft and Alphabet (Google). And that’s just the secret debt, not the debt they publicly admit to. That means the hidden debt of 5 US tech companies is larger than the GDP of over 170 countries around the world.
When you add the hidden debt with the reported debt, it comes to $3 trillion. In case you’re curious, $3 trillion is more than the GDP of every country on earth except the US, China, Germany, India, Japan, the UK, and France.
Many are saying these revelations show that the US tech bubble right now is akin to Enron — the notorious company synonymous with world-shaking accounting fraud followed by a supernova-like explosion.
How Do They Hide All This Debt?
Well, sometimes they create a completely new company (entity) to hide the debt behind. You and I would call this a shell company or a “front,” but in the world of corporate America, it’s just called “business as usual.”
For example, what do you know about Beignet LLC? Are you a big fan? Do you use their products a lot? Do your children nag you constantly — “Mooooommm, can I pleeeeeease get a Beignet account?? Every other kid at school has one!” …Probably not.
You’ve never heard of it because it’s the shell company Meta/Facebook uses to cover up $27 billion of their debt. Here’s from Yahoo Finance:
“Meta’s Hyperion data center in Louisiana is the poster child. Meta and Blue Owl Capital co-funded a separate entity that took on $27 billion in debt to build the facility. Meta is the sole tenant but argues it needn’t record that debt because the entity — not Meta — bears the risk. Meta’s total off-balance-sheet obligations sit at roughly $420 billion, nearly three times its reported debt…” [emphasis added]
And this type of cover-up is actually the norm for these big tech bros. They create companies that are supposed to be ignored and forgotten. They’re meant to be bland and uneventful so no one thinks about them. Essentially, they’re supposed to be the color beige. …Maybe that’s why Meta named this one “Beignet”. I assume the next one they create will be named Shut Up, Forget This LLC.
Proof This Is a Giant Bubble
The US economy right now is basically held up by 7 companies sending money back and forth to each other — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla. So, essentially it’s the same companies with massive amounts of hidden debt. Even NBC News — normally in the business of manufacturing consent for endless unfettered capitalism — has said: “The AI boom’s reliance on circular deals is raising fears of a bubble.” And Reuters, just three days ago, reported: “Big Tech’s circular AI trade grows too big to veil.”
No, it’s actually OpenAI. (Sorry, Stephen.) So Microsoft — a company with $300 billion in secret debt — has only one customer for their AI, and it’s OpenAI — a company with $96 billion of debt. Wow. That sounds like sound fiscal management.
If this doesn’t sound like a bubble perched on top of a Jenga tower perched on top of a house of cards, then I don’t know what does.
And It Gets Worse
A whopping 90% of US GDP growth comes from big tech’s AI spending. So that bubble-Jenga-cards thing is powering the entire US economy. Awesome. Love it. I’m excited about the future. (Slowly fills up 10 gallon jug with potable water.)
This insanity all goes on while most Americans struggle to get by. Less than half of Americans can afford a $1,000 emergency. This means the vast majority of us are living paycheck-to-paycheck.
The Trump administration claims the unemployment rate is a little over 4%. Of course anyone can just look around and know that’s not accurate. The true unemployment rate is nearly 25%! The true rate is found by adding up anyone without a full-time job who wants one or doesn’t earn a living wage ($26,000 a year before taxes).
To Sum It All up
The irony is thick. While most Americans can barely afford rent, we’re inflating a bubble to further enrich a cabal of billionaire sociopaths who don’t care at about any of us. And we’re doing it with a technology meant to replace most of us, which even the creators say has a 20% chance of wiping out all humanity. In order to produce that technology, we need to build massive data centers that steal our water, land, air and future. Dystopian science fiction writers suddenly look like they lack imagination when compared to our reality.