Robin Wigglesworth on Hyperscalers' 1.5 Trillion of Off-Balance Sheet Liabilities, Private Credit, and His Book "A Fabulous Debt"
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I'm joined today by Robin Wigglesworth, editor of AlphaVille, the Financial Times financial blog, and author of a fabulous debt, the epic story of how bonds built the modern world. Robin, wanna talk about bonds, fixed income, of course, but we've gotta start with what's going on right now. You've been doing some work on the off balance sheet hidden leverage of the hyperscalers, Meta, Google, Microsoft. So we're we're reading, oh, a $100,000,000,000 of CapEx. Google's doing that. Microsoft's doing a $150,000,000,000. This is so much money. Oh my god. But, actually, it's looking like it's almost
No. I mean, it's fascinating. I mean, it is one of the biggest capital markets events of, you know, our lifetimes, really. It's just I mean, we've seen massive of CapEx booms before, like the railways in the nineteenth century is like the classic parallel that people draw, transformative technology, very expensive to build. What's unusual, of course, you know, railways back in the day used to be almost like venture capital ideas. Right? They were very sort of VC ish. Today, it's like major large money machines that are doing it. So Google Alphabet makes lots of money. Meta makes lots of money.
If they structured it as plain vanilla debt, we, you know, Goldman and and you wouldn't have to do all all of this work to figure out. It's it is really interesting. So it's really a fight a transformation from a pure complete triple a, double a investment grade counterparty like Microsoft, and it is using that but through a much less investment grade data center developer or a Neo Cloud to then they're the ones who are actually spending the money, and they, you know, report to investors this giant backlog, which, Corey just reported. And that giant backlog is basically these off balance sheet
Yeah.
The hyperscalers have made.
Yeah. I mean, you can say, you know, this is entirely disclosed. I mean, these companies aren't hiding the fact that they're pouring hundreds of billions of dollars into CapEx, and that money has to come from somewhere. They're not hiding this. But I do think, they could perhaps have chosen slightly more transparent approach to this Rather than wanting to preserve the optics of pristine balance sheets, they are kind of increasingly getting creative about, like, how they structure, how they pay, how they disclose it. Just literally going through the 10 queues to look at the purchase commitments
Who's the most complicated?
I guess all the others except Google.
Okay.
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