Oracle at center of tech’s $500 billion AI-fueled rent spree

(Bloomberg/Brody Ford and Rose Henderson) — Cloud-computing companies including Oracle Corp., Microsoft Corp. and Meta Platforms Inc. have committed to spend a combined $500 billion on data center leases in the coming years, an astronomical sum that underscores the bet the industry is making on artificial intelligence.

These obligations have steadily climbed in recent quarters as tech giants inked deals to rent server farms, according to a Bloomberg analysis of quarterly filings.

The future costs, which are in addition to active leases, won’t appear on companies’ balance sheets until they begin making payments on them. Generally they’re tied to data centers, but can also include facilities such as offices or warehouses. Some leases also include clauses that allow companies to escape future obligations under certain conditions.

Oracle has committed the most money to data center leases, inking some $150 billion worth in just the three months ending in November, bringing its total commitments to $248 billion. The company is embarking on a historic build-out of data centers to power the training and deployment of OpenAI’s latest models.

Amid the spending binge, Wall Street has become more focused on data center leases that can last as long as 19 years. After Oracle quietly disclosed its leasing plans in a filing, investors already antsy about its rising expenses sold the shares. “We see this additional disclosure as indicating Oracle will be significantly strapped for capital,” DA Davidson analyst Gil Luria wrote last week.

While spending commitments are booming across the industry, Oracle is the outlier, said Ed Galvin, founder of data center research firm DC Byte. Its cloud business is small compared with Amazon.com Inc., Microsoft and Alphabet Inc.’s Google, and its blockbuster $30 billion-a-year deal with OpenAI this year gives it “massive single-customer exposure,” he said.

Renting, rather than building, data centers means avoiding many up-front development costs. Meta, for example, is renting its flagship AI data center in Louisiana from a special purpose vehicle that will take on tens of billions in debt to construct it. The social media giant has committed to spending $58 billion on leases that haven’t yet commenced — triple the figure disclosed a year earlier.

For more: Meta, xAI Spread Risks of AI Splurge With Off-Balance-Sheet Debt

These lease costs are generally distinct from capital expenditures, a more commonly cited metric for data center spending. That figure includes the cost of buying servers or building sites directly, as well as outlays on items like employee laptops that are unrelated to server farms. For the past four quarters, these costs totaled $372 billion for the six companies analyzed.

Other established companies, such as Microsoft and Google, are also on the hook for tens of billions of dollars in leases. But their robust cash flows have given investors more comfort — so far. Microsoft’s lease costs spiked in 2023 — earlier than most of its peers — as it began handling massive computing demand from partner OpenAI.

Google has traditionally owned and developed the bulk of its own data centers. But in recent quarters, it too reported a spike in plans to rent facilities. As of September, it had $42.6 billion in future leases, about seven times higher than the same period a year prior.

–With assistance from Matt Day and Olivia Solon.

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.