“A trillion here, a trillion there, pretty soon you’re talking real money.” — with apologies to Everett Dirksen
On August 17, the Wall Street Journal reported that nine large technology companies have accumulated roughly $3 trillion in off-balance-sheet commitments, most of it tied to AI infrastructure. By the Journal’s math, these commitments amount to about triple what the companies owe under their recorded leases and long-term borrowings, and they are growing much faster than the roughly $600 billion of capital expenditures the group booked over the past year (“Why Big Tech’s AI Spending Is $3 Trillion Higher Than It Seems,” Rudegeair and Santilli, Aug. 17, 2026).
Intrigued by these findings, we performed an independent analysis, reviewing every 10-Q, 10-K, and relevant 8-K filed by the nine companies in the Journal’s sample from January 2023 through August 2026.
Summary of findings
From each company’s most recent filing, including disclosed subsequent events, we tallied $1.21 trillion in future payments under signed leases that have not yet commenced, and $1.90 trillion in purchase, supply, energy, and cloud commitments. We identified a further $153 billion covering guarantees, lease backstops, contingent capacity, and investment commitments that most media coverage has not addressed. Total off-balance-sheet commitments amounted to $3.26 trillion, or 3.7x the lease liabilities and long-term debt reported on the balance sheet. The commitments are largely undiscounted, and the recognized liabilities are carried at present value.
Figure 1. Committed but unrecognized, versus debt recognized on the balance sheet
$3.26 trillion sitting off the balance sheet
The growth trajectory of these commitments is as impressive as their amount. In the filings covering late 2022, the total across these disclosure categories was roughly $142 billion. This total grew steadily through 2024 and then accelerated sharply: about $616 billion after the September 2025 filings, $998 billion after December, $1.59 trillion after March 2026, and $2.65 trillion after June, on a period-end, as-filed basis that excludes the MD&A aggregates and post-quarter signings in Table 1. The most recent quarter added over $1 trillion of new commitments, a single-quarter increase more than twice the entire stock outstanding a year earlier.
Figure 2. Off-balance-sheet commitments, quarterly 2022–2026.
| Company | As of | Uncommenced leases | Purchase & other commitments | Total off-balance-sheet | Recognized debt + leases | Multiple |
| Alphabet | 6/30/26 | $91.0B | $862.4B | $953.4B | $118.8B | 8.0x |
| Meta | 6/30/26 | $347.0B | $364.0B | $711.0B | $113.5B | 6.3x |
| Microsoft | 6/30/26 | $329.1B | $228.6B | $557.7B | $128.8B | 4.3x |
| Amazon | 6/30/26 | $137.2B | $148.4B | $285.6B | $238.7B | 1.2x |
| Oracle | 5/31/26 | $260.0B | $35.6B | $295.6B | $167.4B | 1.8x |
| Nvidia | 4/26/26 | $32.4B | $182.0B | $214.4B | $12.3B | 17.4x |
| Broadcom | 5/3/26 | n/d | $161.2B | $161.2B | $66.3B | 2.4x |
| AMD | 6/27/26 | $14.0B | $39.4B | $53.4B | $4.3B | 12.4x |
| SpaceX | 6/30/26 | n/d | $28.0B | $28.0B | $39.7B | 0.7x |
| Total | $1,210.7B | $2,049.6B | $3,260.3B | $889.8B | 3.7x |
Table 1. Off-balance-sheet commitments by company, most recent filing, including disclosed subsequent-event additions. Purchase and other commitments combines purchase obligations with guarantees, lease backstops, contingent capacity, and investment commitments. Alphabet and Microsoft figures are reflected in MD&A disclosures. Nvidia, AMD, and SpaceX lease liabilities are partial, so their multiples are overstated. Broadcom and SpaceX do not quantify uncommenced leases. Source: SEC EDGAR; EdgarStat analysis.
We have bucketed these amounts into three disclosure categories: lease commitments, purchase obligations, and guarantees, which are discussed in more detail below.
Bucket #1: $1.21 trillion in leases signed but not yet commenced
The mechanism at play here is the commencement rule under ASC 842, which states that a signed lease is not recognized as a liability until the lessor makes the asset available; so a company can sign long-term datacenter leases, and until the space is turned over, the only trace of the leases’ existence is in the footnotes. The $1.21 trillion currently outstanding, including post-quarter signings, is 4.2 times the amount disclosed a year earlier.
Meta disclosed $9.8 billion of these future payments at the end of 2022. Its Q2 2026 10-Q discloses $279.0 billion, plus another $68 billion signed in July, which together total $347 billion. Microsoft went from $26.0 billion to $329.1 billion over the same period, on leases it expects to commence between fiscal 2027 and 2033, with terms of up to 20 years. Oracle, which builds capacity for AI customers, went from $9.1 billion to $260.0 billion in three fiscal years. Amazon doubled in a year to $137.2 billion. AMD quantified uncommenced datacenter leases for the first time in 2026 and reported $14.0 billion by mid-year, including post-quarter signings.
Figure 3. Uncommenced leases, mid-2025 vs mid-2026.
Meta’s “Hyperion” Louisiana project shows how far the structuring can go. The filings describe it only as a datacenter joint venture. Meta’s initial lease commitment is $12.3 billion for a four-year term beginning in 2029 (with renewal options extending to 20 years), and Meta has provided the venture a residual value guarantee with a threshold around $28 billion. Because Meta judges payment “not probable,” no liability is recorded on the balance sheet. The disclosure is found in the non-marketable equity investments note rather than the commitments note. A similar venture in El Paso, with a guarantee of roughly $13 billion, appeared as a subsequent event in July 2026.
Bucket #2: $1.9 trillion in purchase obligations
The second bucket covers unrecorded purchase commitments for chips, technical infrastructure, energy, and cloud capacity. Roughly $335 billion of the $1.9 trillion is disclosed only in MD&A by two companies.
Alphabet is the clearest case. The Journal reported Alphabet’s purchase commitments at $811 billion as of June 30, up from $332 billion three months earlier. Neither amount appears in the commitments footnote, which lists $707.0 billion and $232.7 billion. The difference in presentation between the two disclosures hinges on the scope of the commitment: the footnote amount includes fixed or minimum-guaranteed commitments, while the MD&A amount includes open purchase orders and other contractual obligations. Under either measure, Alphabet added roughly $479 billion in commitments in a single quarter, with energy agreements now running as far as 2054. Alphabet’s reported MD&A aggregate ($62.1 billion in March 2025 and $149.1 billion in December) has grown thirteenfold in five quarters.
The second case, and the one most likely to be missed, is Microsoft, because its commitments footnote doesn’t quantify anything. Its FY2026 10-K includes a contractual obligations table in the MD&A showing purchase commitments of $194.1 billion, up from $110 billion a year earlier, described as “primarily to datacenters” and including open purchase orders and take-or-pay contracts. Add $34.6 billion of construction commitments, and Microsoft’s unrecorded purchase-type obligations reach $228.6 billion on the unrounded figures, roughly seven times what the footnotes alone reveal. The same table shows total contractual obligations of $743.8 billion, compared to $397 billion a year earlier.
Definitions have also proven fickle. Amazon broadened its definition of unconditional purchase obligations in mid-2024 to include energy procurement and software licensing, and the line has since grown from $32 billion to $130.1 billion. Meta’s non-cancelable contractual obligations rose from $28 billion to $349.3 billion over four quarters, once multi-year cloud capacity contracts were included in the total. This bucket therefore requires careful analysis, as its balance mixes new signings with changes in disclosure practice.
Nvidia’s supply and manufacturing commitments, largely take-or-pay arrangements with foundries, grew from $8.1 billion to $155 billion, of which $30 billion represents multi-year cloud commitments: Nvidia buying capacity from the cloud providers who buy its chips. It has also disclosed $27 billion in equity investment commitments for fiscal 2027, a line that first appeared in late 2025 and includes stakes in Intel and Anthropic.
SpaceX entered the sample in June 2026 through its IPO, and its first 10-Q follows in miniature the same patterns outlined above. It reports $28 billion in non-cancelable contractual commitments, described as “primarily to the Company’s investments in AI infrastructure and third-party cloud capacity arrangements,” with $22.2 billion of that due in 2027 alone.
Through February 2026, Broadcom had just $4.3 billion of its own commitments outstanding. Its Q2 FY2026 10-Q then disclosed $128.1 billion of unconditional purchase commitments, “primarily inventory,” due almost entirely in fiscal 2027 and 2028, as the company locked in manufacturing capacity behind its custom-accelerator backlog.
Buyer commitments reappear as seller bookings elsewhere in the sample. Microsoft’s commercial remaining performance obligation reached $678 billion as of June 30, up 84% year over year, and includes OpenAI’s contracted purchase of an incremental $250 billion in Azure services (disclosed in an October 2025 8-K). Oracle’s remaining performance obligations grew from $62 billion to $638 billion over the course of the review period.
Bucket #3: $277.9 billion in guarantees and backstops
Guarantees and backstops across the sample totaled $277.9 billion. Of that, $87.8 billion falls within the headline $3.26 trillion, and $190.1 billion falls outside of it. The $153 billion third bucket is this $87.8 billion + $65.1 billion in investment commitments, contingent cloud capacity, and other disclosed items that are not guarantees.
On August 17, the same day the Journal’s analysis was published, Nvidia filed an 8-K stating it would provide residual value guarantees capped at $105 billion for roughly 4.25 gigawatts of leases at an Ohio AI campus whose tenant will be an affiliate of OpenAI. The sites are expected to be ready for service beginning in 2028. Nvidia covers any shortfall between guaranteed minimum lease values and recoveries if the tenant defaults, has separately agreed to provide credit support for roughly 3.8 additional gigawatts, and is released if OpenAI achieves a satisfactory credit rating.
Alphabet, for its part, discloses a comparable structure that hasn’t drawn much attention. Its MD&A reports that it has backstops “in the form of financial guarantees and credit derivatives with maximum potential amount of future payments of $7.6 billion and $43.8 billion, respectively,” and explains that, in the event of a default, Alphabet may assume the underlying leases for its own use or sublease them. That is a lease backstop in substance, and the credit derivative portion grew from $28.4 billion three months earlier. Alphabet has separately agreed to provide an estimated $24.1 billion in future backstops for datacenter and energy build-out, and holds $20 billion in capital funding commitments to a private company, running through 2030.
Alphabet’s $51.4 billion of guarantees and credit derivatives is included in the headline $3.26 trillion figure, as are Oracle’s $3.3 billion, AMD’s $4.1 billion of datacenter lease guarantees, and Broadcom’s $29 billion backstop of a customer’s lease obligations. Conversely, Alphabet’s $44.1 billion in future backstops and capital funding commitments are not included because the backstops await finalization of terms and the capital funding is milestone-contingent. Nvidia’s $105 billion and Meta’s roughly $41 billion are also outside of the headline total, each being a maximum potential payment rather than an expected one. Meta states that payment is not probable and has recorded no liability; Nvidia discloses the cap without characterizing likelihood. Including these amounts disclosed by Nvidia and Meta brings the total off-balance-sheet commitments in the sample to about $3.41 trillion. In each case, a supplier or platform is underwriting its customer’s lease obligations, which places the credit risk with the party that also books the revenue.
The regulatory history
The quantity and quality of information companies are required to disclose today about these commitments are a vestige of the historical events that gave rise to the requirements.
Purchase obligations, 1981
The purchase obligation footnote dates back to FASB Statement No. 47, issued when project financing through take-or-pay and throughput contracts was accounted for and disclosed inconsistently. This standard survives as ASC 440, which requires disclosure only where the obligation was negotiated as part of arranging financing for the facilities that will supply the goods. Chip supply and cloud capacity contracts meet no such test, so they fall outside the standard, leaving the broader SEC MD&A requirement to govern them. That scope mismatch likely explains why the largest figures at Alphabet and Microsoft are entirely excluded from the footnote.
Guarantees, 2002
Disclosure requirements pertaining to guarantees came out of the FASB’s consolidation project, where practice had diverged on whether guarantees required disclosure. FASB Interpretation No. 45 requires a guarantor, subject to the standard’s scope exceptions, to record the fair value of a guarantee at inception and to disclose the maximum potential amount of future payments, regardless of likelihood. This rule, now codified under ASC 460, is why Meta, Nvidia, and Alphabet publish caps on their backstops even when no liability is recorded. Meta states that payment under its residual value guarantees is not probable; the others disclose the cap without characterizing likelihood.
Leases, 1976 to 2016
The lease rules carry the longest history. Statement No. 13, issued in 1976, allowed leases that fell short of its bright lines to remain off the balance sheet as operating leases. By June 2005, an SEC staff report prepared under the Sarbanes-Oxley Act (SOX) concluded that “there may be approximately $1.25 trillion in non-cancelable future cash obligations committed under operating leases that are not recognized on issuer balance sheets,” and recommended that the guidance be reconsidered. In February 2016, the FASB issued the standard that became ASC 842, effective for public companies in 2019, which required operating leases to be recognized on the balance sheet at the commencement of the lease. For signed leases that have not commenced, ASC 842-20-50-3(b) requires narrative disclosure, but no quantification. The $1.21 trillion in disclosures in the sampled filings are therefore voluntary. On the same undiscounted basis, they are roughly the size of the unrecognized obligations that prompted this reform in the first place.
The contractual obligations table, 2003 to 2020
One rule, on the other hand, has been modified to reduce disclosure rather than to increase it. Beginning in 2003, an SEC rule required a standardized table of contractual obligations in MD&A, with purchase obligations as a named category and a corresponding definition. Congress had directed the Commission to address off-balance-sheet arrangements under Section 401(a) of SOX; the table itself was the Commission’s own addition. In November 2020, the SEC, as part of its disclosure modernization initiative, eliminated this table in favor of principles-based liquidity discussion. The disclosure reduction was phased in during 2021, and, by twist of fate, the AI buildout began in earnest immediately after the one requirement designed to aggregate these commitments in comparable form was retired.
Remnants of this retired rule can still be encountered in the wild. Microsoft, for instance, still voluntarily publishes a contractual obligations table in its MD&A, which is the reason its $194.1 billion in purchase commitments is visible at all. Broadcom defines its purchase commitments in language that adheres to the retired SEC definition almost word for word. Alphabet publishes an all-in aggregate that the rule would have required in tabular form and that no standard requires today. Companies are voluntarily (albeit inconsistently) reaching for a standard that no longer exists, which is ironically the comparability problem the contractual obligations table was meant to solve.
The financial statement transformation underway
These arrangements are reshaping the group’s balance sheets: Alphabet’s long-term debt more than doubled in six months, from $46.5 billion at year-end 2025 to $98.2 billion by June 30, 2026. Amazon’s went from $51 billion to $129 billion in nine months. Oracle’s stands near $130 billion, and Meta’s rose from $29 billion to $84 billion in one year. Microsoft’s fell by $2.9 billion over the same window. Across the eight filers with comparable prior periods, total debt rose by $245.5 billion. Alphabet’s June equity issuance netted $49.6 billion, and Amazon entered a $17.5 billion delayed-draw term loan.
The AI buildout is already affecting these companies’ cash flows. Amazon’s operating cash flow trailed capital expenditures by $27 billion in the first half of 2026. Alphabet’s Q2 2026 earnings release puts its free cash flow at negative $5.9 billion. Oracle spent $55.7 billion on capex in fiscal 2026 against $32 billion of operating cash flow. Management guidance across the sample points higher still, with Alphabet guided 2026 capital expenditures of $175 to $185 billion, Amazon to about $200 billion, and Meta to $130 to $145 billion as of its July update, which amounts to more than half a trillion dollars of capex for three companies in one year.
Implications for transfer pricing
Standard comparability screening seldom includes executory commitments, and screens built on reported financials capture only recognized assets and liabilities. Two prospective comparables can show identical balance sheets, even though one may be locked into decades of financial commitments that the other isn’t. For tested parties and comparables in the tech sector, footnote and MD&A review of off-balance-sheet commitments is prudent for comparability analysis.
We look forward to expanding on off-balance-sheet commitments and their effects on transfer pricing analysis in future blog installments.
References
Press
Rudegeair, Peter, and Peter Santilli. “Why Big Tech’s AI Spending Is $3 Trillion Higher Than It Seems.” The Wall Street Journal (Online), August 17, 2026.
Company filings
Forms 10-K, 10-Q and 8-K filed with the SEC by Alphabet, Amazon, Meta, Microsoft, Oracle, Nvidia, Broadcom, AMD and SpaceX between 2023 and 2026, covering fiscal periods from late 2022 through the second quarter of 2026. The quarterly series draws on 118 filings. Retrieved from SEC EDGAR.
Accounting standards
- FASB Statement No. 5, Accounting for Contingencies (March 1975), codified as ASC 450. Source. The probable, reasonably possible and remote framework that governs whether a guarantee is accrued.
- FASB Statement No. 13, Accounting for Leases (November 1976). The four classification criteria, including the 75 percent and 90 percent tests, under which leases failing all four remained off the lessee’s balance sheet as operating leases.
- FASB Statement No. 47, Disclosure of Long-Term Obligations (March 1981), codified as ASC 440-10-50-2 and 440-10-50-4. Source. Paragraph 6 limits the unconditional purchase obligation disclosure to obligations negotiated as part of arranging financing for the facilities that will supply the goods or services, a condition chip supply and cloud contracts do not meet.
- FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees (November 2002), codified as ASC 460. Source. Paragraph 13(b) requires disclosure of the maximum potential amount of future payments, undiscounted and not reduced by recoveries, even where payment is remote. Paragraphs A4 and A5 attribute the project to the Board’s consolidation work and to diversity in practice.
- FASB Accounting Standards Update No. 2016-02, Leases (Topic 842) (February 25, 2016), effective for public business entities for fiscal years beginning after December 15, 2018.
- ASC 842 Master Glossary, “commencement date of the lease,” and ASC 842-20-25-1. A lessee recognizes nothing until the lessor makes the underlying asset available for use.
- ASC 842-20-50-3(b). Requires narrative disclosure of leases signed but not yet commenced. It does not require quantification, which is why the amounts in this analysis are voluntary and unevenly comparable across filers.
- ASC 606-10-50-13. The remaining performance obligation disclosure behind the Microsoft and Oracle figures used here as the seller-side mirror of buyer commitments.
SEC rulemaking and staff reports
- SEC Release No. 33-8182, Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet Arrangements and Aggregate Contractual Obligations (adopted January 28, 2003; 68 Fed. Reg. 5982). Source. Created the contractual obligations table with purchase obligations as a named category. The table was adopted under the Commission’s own authority; Section 401(a) of Sarbanes-Oxley directed the off-balance-sheet arrangements disclosure, not the table.
- SEC Release No. 33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information (adopted November 19, 2020). Source. Eliminated the contractual obligations table in favor of a principles-based liquidity discussion, phased in during 2021.
- Staff of the U.S. Securities and Exchange Commission, Report and Recommendations Pursuant to Section 401(c) of the Sarbanes-Oxley Act of 2002 On Arrangements with Off-Balance Sheet Implications, Special Purpose Entities, and Transparency of Filings by Issuers (June 15, 2005). Source. Estimated approximately $1.25 trillion of undiscounted non-cancelable future cash obligations under operating leases, extrapolated from a 200-issuer sample.
- 17 C.F.R. 229.303 (Item 303 of Regulation S-K), current text. Source. Contains no contractual obligations table today, but still requires discussion of material cash requirements from known contractual obligations.
Method
Figures are as stated in the filings. Where a company discloses an aggregate in MD&A that does not appear in its commitments footnote, this analysis uses the MD&A figure; this choice accounts for roughly $333 billion of the purchase-obligation total and is the single most consequential methodological decision in the article. Debt is stated at carrying value. Residual value guarantees the guarantor judges as not probable are held outside the headline total and reported separately.
This post is analysis and commentary. It is not investment advice.