PremiumAI's Off-Balance-Sheet Time-Bomb Goes Mainstream: Leverage Might Be Much Worse Than It Looks
A month ago, we dropped a widely read report (for premium subscribers) detailing "The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle" looking at the more murky, less discussed, aspects of the AI ecosystem.
In the report, we explained why merely looking at the projected CapEx spending - whether $1.1 or $1.4 trillion - is missing arguably the most important number, highlighting the elephant in the room: $1.8 trillion in off-Balance sheet operating leverage, to wit: "Long-term purchase commitments of ~$1tn and lease commitments >$800bn further support the AI buildout, but add off-BS operating leverage."