The Value Road · 23 October 2026

In 2026 Meta needed $27.3 billion to build a data center in Louisiana. It did not want the debt on its balance sheet. So it borrowed the money through a company called

Beignet Investor LLC

Named after the New Orleans doughnut. The bonds are due in 2049. It was the largest private-capital deal on record.

This is not a joke I made up. It is in the filings. Everything on this page is.

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Then they did it again

Meta's El Paso campus needed another $12.5 billion. That one was borrowed through

Sopaipilla Investor LLC

Named after the fried pastry. Nobody has explained the pastries.

"Off-balance-sheet gymnastics 24 years after Enron."

IFR — a trade publication for bond bankers — on the Meta deal

The guarantee

If Meta walks away it guarantees the building's value for sixteen years. Its maximum exposure under those guarantees is $41.5 billion, up from $28.1 billion in December. The liability Meta records on its balance sheet for all of that is

$0

Because a payout is described as “not probable.”

S&P rates the Beignet bonds one notch below Meta itself, so the credit risk comes back to Meta anyway. The bonds traded at 110¢ after issue. They were around 91¢ on 22 October.

Maturity

To help pay for all this, Alphabet sold a hundred-year bond. It does not mature until

2126

It buys chips that will be close to obsolete by 2031. The debt outlives the collateral by about twenty generations of silicon.

Hyperscalers sold roughly $220 billion of bonds through 10 August, going from under 1% of global investment-grade issuance in 2024 to about 10% this year, per the IMF.

The cut

Microsoft's 2026 capex number went down by about $15 billion this year. Here is how they did it.

They moved it to a different line.

New data-center leases are now classed as operating leases, which sit outside capex. The money still leaves the building. It just leaves through a door with a different name on it.

"Our calendar year 2026 CapEx investment expectations remain unchanged."

Amy Hood, Chief Financial Officer, Microsoft

The circle

Microsoft put about $13 billion into OpenAI. OpenAI committed $250 billion back to Azure. Amazon put roughly $83 billion into the two labs and got more than $200 billion of orders back. Nvidia took a $30 billion stake in OpenAI and has reportedly offered up to $105 billion of credit support for a data center that will be filled with Nvidia chips.

The IMF calls this
“wrong-way risk.”

It counted fourteen of these deals since 2023: about $300 billion of equity and $650 billion of debt. Everyone else can just see that it's a circle.

The order book

OpenAI and Anthropic have promised about $1.17 trillion of compute. Between them they make roughly $115 billion a year. That works out at

$10 of promises for every $1 of revenue

Most of it comes due between 2027 and 2032 — after the money they have already raised is expected to run out. By my estimate, 38–45% of Big Tech's $2.35 trillion order book rests on those two companies.

Oracle's backlog was $138 billion in May 2025. One quarter later it was more than $455 billion, after OpenAI signed a $300 billion contract.

The rent

There is $1.06 trillion of data-center rent already signed and not one dollar of it has started. When the buildings are handed over, the rent comes out of operating cash flow every year for the next fifteen to thirty. For Oracle that is roughly

53%

of its operating cash flow, on my rough math. Meta about 18%. Microsoft about 11%. Alphabet about 3%.

My estimate, spreading each company's commitments evenly over seventeen years — the midpoint of Oracle's lease terms — against its latest annual operating cash flow. Real schedules start gradually and cash flow should grow. Oracle's lease cost has already nearly doubled in a year, to $1.1bn a quarter, with most leases not yet started.

The chips

“A bunch of chips sitting in inventory that I can't plug in.”

Satya Nadella, Chief Executive Officer, Microsoft

More than 2,000 gigawatts of power projects are waiting to connect to the US grid. The median wait is over five years. A chip waiting for power is losing its short useful life while the debt against it keeps charging interest.

Oracle invoked force majeure on a 2.45 GW OpenAI site in New Mexico in September, citing power delays. Gartner reportedly expects more than $75 billion of GPU write-downs by 2028.

The price of a name

IREN pays 6% on GPU debt backed by a Microsoft contract, and 9% on everything else.

That three points is the market price of Microsoft's name.

Most of the leverage in this system sits with borrowers who don't have it. xAI financed its chips through a roughly $20 billion vehicle borrowing at about 12.5%, secured only by the chips.

CoreWeave's default swaps hit about 1,195 basis points intraday on 15 October. In its June quarter a 59% adjusted EBITDA margin became a 5% adjusted operating margin and a $626 million net loss.

We have done this before

From 1996 to 2003 telecom companies poured more than $500 billion into fiber, mostly borrowed. At the bottom, about 2–5% of it was in use. The bondholders got back

16¢

on the dollar, against a historical median of 39¢. The equipment makers lost about 98% of their value. Cisco did not regain its 2000 peak until December 2025 — twenty-six years.

The fiber worked. It carries nearly every video on the internet. It just made money for the people who bought it in the fire sale. Global Crossing, once worth about $47 billion, sold control for $250 million.

The point

AI will change the world. That was never the question.

The people who bought railroad bonds in 1890 and fiber stocks in 1999 were right about their technologies too. They just weren't the ones who got paid. The risk I see is not that AI fails — it is that 2027–2032 obligations were signed on the assumption that scarcity lasts and two cash-hungry labs can keep raising money.

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The evidence, in 16 charts.

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