The AI Daily Brief · Friday, July 31, 2026
Hyperscalers are reportedly holding $1.65 trillion in data center debt, primarily in special purpose vehicles (shell companies) rather than on their balance sheets. AI bears compare this to the subprime crisis, fearing systemic risk if these debts are not managed carefully, though the presenter suggests differences in debt usage and borrower strength mitigate this risk.
“They believe that hyperscalers are holding $1.65 trillion in data center debt, debt which is largely being held by the companies, not on their balance sheets, but in special purpose vehicles.”
“They compare it to the subprime crisis. Rather than putting debt on their own balance sheets, where they have to disclose it to the market, the hyperscalers are hiding it in shell companies.”
“Nathan's core argument is that the hyperscalers are fundamentally a different type of borrower to the subprime borrowers during the financial crisis.”