Nvidia’s Risky Business
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- Microsoft is the only hyperscaler still funding AI CapEx without debt, posting $19.6 billion in free cash flow last quarter; CEO Satya Nadella called Liaquat Ahamed's book "1873" "the book to be read" on Microsoft's recent earnings call.
- Oracle, Meta, Alphabet, and Amazon issued $80 billion in debt between September and November 2025, then $194 billion in 2026's first seven months — with 86% of those bonds already trading above issuance yields and bond cover ratios falling from 5x to under 2x.
- Google announced an $85 billion equity raise in early June, including a special $10 billion issuance to Berkshire Hathaway that the piece frames as an endorsement of runaway AI demand.
- DeepMind CEO Demis Hassabis has been promoted to chairman and co-lead Jeff Dean has departed, prompting SemiAnalysis to declare "Gemini is Cooked" and that "DeepMind is no longer a frontier lab."
- SemiAnalysis identifies Google Cloud rather than Gemini as the biggest beneficiary of the DeepMind leadership shakeup, since CEO Thomas Kurian's team now wins the internal compute-allocation fight.
- Sergey Brin is reportedly "deeply involved and closely allied" with new DeepMind CEO Koray Kavukcuoglu, per the piece, as Google runs out of patience with Hassabis's "world models" approach to AGI.
- Liaquat Ahamed's "1873" frames the $500 million in annual 1870s railroad bonds as roughly the $600 billion projected for 2026 AI investment, using a 1,200x inflation-and-economy multiplier.
Why it matters: Hyperscalers' $194 billion in 2026 debt is the clearest bubble tell yet: 86% already trade above issuance yields, cover ratios collapsed from 5x to under 2x. With DeepMind declared 'no longer a frontier lab' by SemiAnalysis, the biggest winner of all this AI capex may be Google Cloud — not the labs buying Nvidia's chips.
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