AI Capex Boom Increases US Corporate Counterparty Exposure

The surge in AI is providing a significant recurring revenue stream for a small and growing number of companies in the US, and at the same time increasing their dependence on a few parties, according to a new report from Fitch Ratings. These companies, operating in the technology, utilities and real estate sectors, are incurring high capital expenditures and upfront cash outlays to capture AI-driven revenues. These contracts support revenue and profit growth, but also increase customer concentration and counterparty risk, with revenue resilience dependent on customer funding capacity and deployment timelines.

Credit quality varies between AI partners. Hyperscaler companies show strong credit profiles supported by large operating scale, diversification and strong operating cash flows, while leading AI platform developers reveal limited financials, making valuation difficult. OpenAI’s excellent funding access supports liquidity, but large multi-year infrastructure commitments imply the need for ongoing external funding.

Exposure is increasing in an increasing number of issuers. Oracle’s AI computing revenue (BBB/Stable) could approach 50% of sales in fiscal 2029, while CoreWeave (BB-/Positive) sees 62% of Microsoft’s 2024 revenue. In power, Talen Energy’s (BB-/Negative) PPA with Amazon (AA-/Stable) could drive about half of standalone gross margins by 2032, while VoltaGrid’s (BB-/Stable) Oracle-connected development is expected to account for about 70% of 2028 EBITDA. Data center REITs such as Equinix, Inc. (Equinix; BBB+/Stable) and Digital Realty Trust, Inc. (DLR; BBB/Stable) benefits from a diversified tenant base that reduces single customer risk.
Source: Fitch Ratings