# Fed Flags AI as Top Cited Risk; Off-Balance-Sheet Data Center Obligations Outgrow Debt

Mohit Tyagi · 2026-11-14 · Industry

[https://timesof.ai/2026/11/fed-financial-stability-report-ai-top-risk-680b-debt-2t-guarantees](https://timesof.ai/2026/11/fed-financial-stability-report-ai-top-risk-680b-debt-2t-guarantees)

> The Federal Reserve's November Financial Stability Report, released November 13, says AI was the risk most often cited by the 23 market contacts in its fall survey; Reuters puts the share at 87%, up from 50% in May. The Fed estimates advanced-computing debt issuance at more than $680 billion by October 2026, about five times 2023, and outstanding public debt at more than $1.1 trillion. Not-yet-commenced leases exceed $1 trillion and guarantees and contract commitments exceed $2 trillion, both undiscounted, so big tech's exposure to a downturn may be substantially larger than its balance sheets show. The largest US banks have close to $1 trillion of related exposure.

The Federal Reserve's main worry about the AI build-out is not the debt it can count but the obligations that never reach a balance sheet. Its November Financial Stability Report, released on **November 13**, puts advanced-computing debt issuance at more than **$680 billion** this year, and then says the leases, guarantees and contract commitments around that debt have grown "even more rapidly."

## What the Fed found

Debt issuance to finance advanced computing reached more than **$680 billion** by October 2026, about five times the **$130 billion** issued in all of 2023, the Fed says. Such borrowing rose from under **6%** of nonfinancial investment-grade corporate issuance in 2023 to about **31%** in 2026, and outstanding public debt tied to advanced computing is estimated at more than **$1.1 trillion**. Private-credit deals make the true total harder to measure, the report adds.

The larger numbers sit off the balance sheet. Not-yet-commenced leases have undiscounted values above **$1 trillion**, and take-or-pay contracts, residual value guarantees and other obligations exceed **$2 trillion**, in an analysis covering Amazon, Alphabet, Broadcom, Meta, Microsoft, Nvidia and Oracle. The Fed describes how the plumbing works: hyperscalers sign long leases that developers use to borrow, and GPU makers "often provide a guaranteed residual value of the GPU collateral" to support chip purchases by AI firms. Combined with equity stakes, that creates what the Fed calls a "circular financing" dynamic. Reuters, adding the categories together, reported that debt, guarantees and unstarted leases could exceed **$3 trillion**.

The Fed's reading cuts both ways. The biggest firms may absorb losses in a downturn, shielding the rest of the system, but "these firms' economic exposure to such a downturn may be substantially larger than suggested by their on-balance-sheet liabilities." The riskier slices of these financings sit with high-yield funds, life insurers, business development companies and private debt vehicles, and the largest US bank holding companies have close to **$1 trillion** of exposure to tech firms, data-center developers, related special purpose entities and utilities, which the annual stress test evaluates. Comparing five hyperscalers with the late-1990s broadband build-out, the Fed says the pace of the current cycle's investment "may surpass that of the 1990s telecom cycle relatively soon."

## The survey

AI topped the list of shocks cited by the New York Fed's market contacts, ahead of a risk-asset correction and higher long-term rates. Respondents named three concerns: stretched valuations and a correction if earnings disappoint, cyber risk from state actors "or damage caused by frontier AI models themselves," and complex AI financing. Reuters reported that **87%** of contacts cited AI, against **50%** in May. The survey ran in September and October, before [Jensen Huang resigned as Nvidia's chief executive](https://timesof.ai/2026/10/nyt-megaspeed-exec-chinese-intelligence-asset-jensen-huang) and before the midterm results, Reuters noted. Lenders were already pulling back: [banks and credit investors told Reuters this month](https://timesof.ai/2026/11/banks-credit-investors-wary-ai-debt-selloff-reuters) they were wary of more AI debt.

## Limits

- The survey covers **23** contacts, so the 87% share is roughly 20 people; the percentage is Reuters' reading of the Fed's chart.
- The Fed says the lease, guarantee and commitment figures are undiscounted and "not directly comparable" with on-balance-sheet debt, which is discounted. The $3 trillion total adds them together and is Reuters' framing, not a Fed headline number.
- The debt estimate excludes some private placements, and the Fed itself says the full amount of private-credit borrowing is hard to measure.

## Sources

- [Federal Reserve: Financial Stability Report, November 2026 (November 13, 2026)](https://www.federalreserve.gov/publications/files/financial-stability-report-20261113.pdf)
- [Reuters via Investing.com: AI rockets to top of worries about financial system in latest Fed survey (November 13, 2026)](https://www.investing.com/news/economy-news/ai-rockets-to-top-of-worries-about-financial-system-in-latest-fed-survey-5026488)