Moody's Warns AI Spending Spree Could Pressure Credit Ratings for Big Tech

Moody's Investors Service issued a rare warning Thursday, saying the 'unprecedented' level of AI-related spending by major technology companies could weaken their credit quality. The rating agency specifically cited Amazon, Meta, and Alphabet as facing elevated risks as they pour billions into data centers, chips, and AI infrastructure. Moody's assessment points to a growing tension between the race to dominate AI and the need to maintain strong balance sheets. For investors, this means the era of nearly risk-free Big Tech debt may be ending, as rising leverage and uncertain returns from AI investments could lead to downgrades. Even if the companies maintain investment-grade ratings, any negative outlook revision could widen credit spreads and raise borrowing costs. The warning comes as AI spending shows no signs of slowing, with capital expenditure forecasts for 2026 well above historical levels across the sector.