MOODY'S WARNING A.I. INVESTMENT BOOMS INTO THE FINANCIAL SOUNDNESS OF THE TECHNOLOGY GIANTS

On 25 July, as global technology giants compete to build artificial intelligence infrastructure, Moody ' s rating warns that the AI investment boom is eroding the free cash flow of large cloud computing service providers and pushing up balance sheet risk, future investors will pay more attention to whether these firms will be able to reap sufficient returns from large AI inputs. In a study released this week, Moody indicated that six scientific and technological enterprises, including Microsoft (MSFT.US), Amazon (AMZN.US), Google parent company Alphabet (GOGL.US), Meta (META.US), Orcl.US and CoreWeave (CRWV.US), were moving from the “light assets” business model that used to rely on software, intellectual property rights and cloud services to a “heavy assets” model that required large-scale infrastructure, such as data centres. Moody noted that this shift required unprecedented capital inputs and financing and could undermine the credit quality of the companies. The Agency expects that AI infrastructure investment will continue to climb, with capital expenditures of six companies to reach approximately $78.5 billion in 2026 and a further $1 trillion in 2027. The report notes that generating AI requires a large number of hardware inputs, such as data centres, GPU servers and high-performance chips, compared to traditional software operations, leading to a fundamental change in the technological industry ' s long-standing path to maintain high profitability and robust balance sheets based on the light asset model。