Is AI a bubble? Five numbers to watch in data-centre debt

Nobody can say for sure whether AI is a bubble until afterwards. What you can do is watch five numbers that show how the data-centre boom is being paid for, and whether the people lending the money are getting nervous. On 6 October 2026, Bloomberg Law reported that debt backing data centres was still selling off in the secondary market, the market where investors trade bonds and loans after they are first sold.

The five numbers at a glance

1. Capex: the size of the bet

Capex, or capital expenditure, is money spent on things that last for years, such as data centres and chips (see our explainer on capex). In the quarter to 30 June 2026, the four largest cloud companies reported spending on property and equipment of:

• Amazon: $54.2 billion, up from $32.2 billion a year earlier.
• Alphabet: $44.9 billion, double the $22.4 billion of a year earlier.
• Microsoft: $35.8 billion in its fiscal fourth quarter, up from $17.1 billion.
• Meta: $31.08 billion, including principal payments on finance leases. Meta expects $130 billion to $145 billion for all of 2026.

That adds up to about $166 billion in three months, more than some of them bring in as cash. Alphabet's free cash flow (operating cash flow minus capex) was negative $5.9 billion for the quarter, and Amazon's was an outflow of $7.6 billion over the trailing twelve months.

2. Bond issuance: how much is borrowed

When cash flow is not enough, companies borrow. Alphabet, Amazon, Meta and Oracle had issued nearly $223 billion of bonds in 2026 as of 20 August, according to LSEG data cited by CNBC. That is more than double the total for all of 2025. A UBS strategist told CNBC that about 8% of the investment-grade bond index, the index of the safest-rated company debt, is now in such hyperscaler bonds. Meta's own filing shows its long-term debt rose to $83.7 billion at 30 June 2026, from $58.7 billion at the end of 2025, after a $24.9 billion note sale in May.

We could not read order-book figures, meaning how much investors offered to buy compared with the amount sold, on a source we can cite, so they are not in this piece.

3. Credit default swaps: the price of insurance

A credit default swap (CDS) is a contract that pays out if a borrower defaults. Its price, the spread, is quoted in basis points (bp), where 100 bp is one percentage point a year. A wider spread means the market sees more risk.

Bloomberg Law reported on 6 October that five-year CDS on hyperscalers' debt were near their widest levels of the year, and linked this to a recent interest-rate rise and higher Treasury yields. On 15 October, CNBC reported that Oracle's five-year CDS spread was last at 282 bp, up about 10% in a week, and that CoreWeave's was nearly 1,038 bp. An S&P Global Market Intelligence executive told CNBC that a spread of 1,000 bp or more usually signals credit distress.

4. Off-balance-sheet financing: debt by another name

Some of the build-out does not show up as borrowing. In October 2025, Meta formed a joint venture with funds managed by Blue Owl Capital to build its Hyperion data-centre campus in Richland Parish, Louisiana. Blue Owl's funds own 80% and Meta 20%, with about $27 billion in development costs. Meta's latest 10-Q says it does not consolidate the venture, so its debt is not on Meta's balance sheet. Meta will lease the campus from 2029 and has given residual value guarantees, a promise to cover a shortfall in the property's value if it walks away, with a threshold of about $28 billion.

Beyond that venture, Meta reported about $279 billion of data-centre and other leases signed but not yet started as of 30 June, plus about $68 billion more signed in July.

5. AI revenue against the spend

Amazon said its AWS AI business passed a $25 billion annual run rate, growing at triple-digit percentages. Microsoft said Azure revenue passed $100 billion in its fiscal year and its commercial remaining performance obligation, contracted revenue not yet booked, rose 84% to $678 billion. Alphabet's Google Cloud revenue was $24.8 billion in the quarter, up from $13.6 billion.

Our take

None of these numbers on its own says "bubble". The real signal is when they move together. Capex and borrowing are both still rising, and insurance on AI-linked debt is getting more expensive. The clearest gap is at Amazon: one quarter of capex, $54.2 billion, is about twice the annual run rate of its AI business. That gap can close if demand keeps growing. It becomes a problem if lenders stop being willing to fund it first.

How to check these yourself

• Capex: read the cash flow statement in each company's next quarterly results on SEC EDGAR.
• Bonds: watch whether new deals need higher yields to sell.
• CDS: watch whether stress moves from smaller borrowers like CoreWeave to the largest names.
• Leases: search the 10-Q notes for leases that "have not yet commenced".
• AI revenue: note when companies give a hard number, not just a growth rate.